Question
a) As finance manager of Manzer Limited you are attempting to assess the cost effectiveness of the current ordering strategy, whereby ten orders are made
a) As finance manager of Manzer Limited you are attempting to assess the cost effectiveness of the current ordering strategy, whereby ten orders are made each year. Outline any changes that you would make to the ordering process. b) The local supplier is ceasing to manufacture the product. A new supplier has been sourced but will take three weeks to deliver the product. Advise on the appropriate reorder level to ensure that no stockouts occur. c) The new supplier makes contact to say that they are having production capacity difficulties and that the earliest delivery time will be two weeks and the worst case scenario will be delivery within five weeks. Advise on the revised reorder level and identify the safety stock level to ensure that no stockouts occur. d) At present, sales occur evenly throughout the 50 weeks of the financial year. However, the sales manager has advised that the pattern will change and demand may vary between half to double the current weekly level. Assuming a lead time of three weeks, advise as to the required reorder level to ensure that no stockouts occur. e) Assuming that sales can vary as outlined in d) and that the lead time can vary between two and five weeks as in part c) advise on the new reorder level that is required to ensure no stockouts occur
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