Stat week 10
sbatniji
week_10.docxPurpose
To assess your ability to manage inventory flow order and calculate optimal scenarios.
Action Items
1. Review Case 6-39 in Quantitative Analysis.
6-39
Dillard Travey receives 5000 tripods annually from Quality Suppliers to meet his annual demand. Dillard runs a large photographic outlet, and the tripods are used primarily with 35-mm cameras. The ordering cost is $15 per order, and the carrying cost is 50 cents per unit per year. Quality is starting a new option for its customers. When an order is placed, Quality will ship one-third of the order every week for three weeks instead of shipping the entire order at one time. Weekly demand over the lead time is 100 tripods.
(a) What is the order quantity if Dillard has the entire order shipped at one time?
(b) what is the order quantity if Dillard has the order shipped over 3 weeks using the new option from Quality suppliers, Inc.? To simplify your calculations, assume that the average inventory is equal to one-half of the maximum inventory level for quality’s new option.
(c) Calculate the total cost for each option. What do you recommened?
2. Completely answer the following questions listed at the end for the problem exercise:
1. What is the optimal order quantity?
2. Quality is offering a new shipping option. When an order is placed, Quality will ship one-third of the order every week for three weeks instead of shipping the entire order at one time. What is the order quantity if Dillard chooses to use this option? To simplify your calculations, assume that the average inventory is equal to one-half of the maximum inventory level for Quality's new option.
3. Suppose Quality Suppliers offers to ship one-fifth of the order every week for five weeks. What is the order quantity under this option? Make the same assumption as in part (b).
4. Calculate the total cost for each option. What do you recommend?
Purpose
To assess your ability to manage inventory flow order and calculate optimal scenarios.
Action Items
3. Review the Martin-Pullin Bicycle Corporation Case Study in chapter 6 of Quantitative Analysis.
4. Build the appropriate Excel model using a simple EOQ model (ignore the seasonal demand aspect).
5. Completely answer the questions at the end of the case study.
