Need help with inventory model lesson

Due: 11:59 p.m. EST Sunday of Unit 7 Points: 100 Instructions: Mega-Save is a large retail grocery chain in Rhode Island. It stocks some of its retail stores from a regional distribution warehouse in a Providence suburb, handling a variety of dry, refrigerated, and frozen food items there. These items are ordered and received from vendors, then shipped out to retail stores that place their own orders directly with the distribution warehouse. Both the retail stores and the warehouse run 24/7/360. One high-volume item is pre-packaged boneless skinless chicken breast. During 2016 in the United States per capita consumption of chicken was over 90 pounds according to the National Chicken Council. The Council further says Americans devour 1.25 billion chicken wings during the Super Bowl alone. Thus, chicken is a critical item for Mega-Save and every other grocery retailer, making availability for the shopper extremely important. A large safety stock of frozen chicken breast is kept at the Mega-Save warehouse. However, management is concerned that the safety stock held may be too large, and need assistance setting a proper level. Mega-Save receives this product frozen from a vendor and typically holds it a short time at the warehouse before shipping it on to retail locations. There the individual packages are thawed in display cases for customer purchases. To better understand the safety stock problem the manager of the Providence warehouse has pulled the attached data on recent weekly orders for chicken breast and the order lead times of the vendor.

Historical Demand (pounds)

383,577 355,592 440,888 579,286

445,042 399,276 436,796 450,752

471,787 393,401 418,193 438,394

393,829 504,114 436,510 446,084

436,235 365,483 653,094 431,553

469,081 531,049 409,288 440,592

381,845 424,306 448,167 416,391

422,810 525,498 678,805 471,020

432,367 459,687 436,868 395,192

388,689 527,324 435,946 452,301

BUS523 – Quantitative Analysis and Decision Making for Managers

Unit 7 Assignment: Mega Save Inventory Levels

Historical Lead Times (Days)

5.7 5.3 5.7 7.7 4.6

4.7 4.3 5.6 4.4 5.2

6.2 4.2 7.3 6.5 4.5

4.3 5 5.9 5.1 5.6

7.2 5.2 7.5 7.9 6.2

7.7 3.9 5.5 7.8 6.9

3.8 5.4 19.2 5.5 5.7

3.9 5.6 6.9 6.2 8.2

7.1 6.1 8.4 5.6 4.3

4.9 5.6 4.6 5.8 3.9

Frozen chicken breast is delivered to the Providence facility in 40-pound cases by refrigerated truck. It is held in a large industrial freezer and ultimately shipped out to retail stores in those same cases. Ordering costs of $7500 are high owing mostly to the cost of transporting the frozen product as well as time and labor to unload trucks. Though the amount is difficult to estimate accurately, Mega-Save assigns a $80 annual cost for holding a case of frozen chicken breast at the warehouse for one year. (Of course, this is a theoretical cost since the time chicken is held typically isn’t this long.)

1. Determine the amount of safety stock that should be held at the warehouse to support a

95% service level to the downstream retail stores.

2. The data shows one very long chicken shipment lead time resulting from very inclement

weather. Mega-Save’s supply chain managers are discussing whether that shipment

should be dropped from the data since it represents a very extreme case. If this

shipment is dropped from the data what impact would that have on the projected level of

safety stock needed?

Requirements:

 Please follow APA guidelines (proper margins, double-spaced, Times New Roman font, 12-point font).

 Use APA citation format and include a reference/works cited page when necessary.

 Include a cover page that includes your name, assignment title, the course and date.

 All assignments submitted should be four (4) pages maximum including cover page and reference/works cited page.

Evaluation Rubric for Unit 7: Mega Save Inventory Levels Assignment

CRITERIA Deficient

(0 – 22 pts.) Development

Needed (23 – 31 pts.)

Proficient (32 – 39 pts.)

Exemplary (40 pts.)

Determined the amount of safety stock that should be held at the warehouse to support a 95% service level to the downstream retail stores

Did not answer.

Underdeveloped section, unclear reasoning, incorrect answers behind the decision.

Mostly addresses the amount of safety stock with accurate justifications, some details were lacking.

Thoroughly addresses the amount of safety stock with accurate justifications, no details were lacking.

Describes the impact would that have on the projected level of safety stock needed

Ideas are not complete or inaccurate, no justifications presented.

Impact is not clearly presented and/or little evidence of critical thinking displayed.

Impact is mostly accurate and presented with solid analysis and critical thinking displayed.

Impact is accurate and presented with solid analysis and critical thinking displayed.

(0 – 5 pts.) (6 – 7 pts.) (8 – 9 pts.) (10 pts.)

Grammar and Spelling

Writing assignment contains several errors in grammar, spelling and punctuation which detracts from content of the passage.

Writing assignment contains several minor errors in grammar, spelling and punctuation, but does not detract from content of the passage.

Writing assignment is mostly free of errors in grammar, spelling and punctuation.

Writing assignment is free of errors in grammar, spelling and punctuation.

(0 – 5 pts.) (6 – 7 pts.) (8 – 9 pts.) (10 pts.)

Format and APA

Did not demonstrate correct use of in-text citations in the appropriate APA format; does not include a title and reference page.

Occasionally demonstrates correct use of in-text citations in the appropriate APA format; a title and reference page is included, but it may be incomplete or contain errors.

Mostly demonstrates correct use of in-text citations in the appropriate APA format; includes a title and reference page, but it may contain errors.

Consistently demonstrates correct use of in-text citations in the appropriate APA format; includes a title and comprehensive reference page.