Question
A company assembles and sells skateboards. One popular model is the ICE. The final assembly plan for April to September, which also represents 50% of
A company assembles and sells skateboards. One popular model is the "ICE". The final assembly plan for April to September, which also represents 50% of a full year’s demand:
| Month | April | May | June | July | August | September | October |
|---|---|---|---|---|---|---|---|
| Forecast (units) | 5000 | 7000 | 10000 | 2000 | 4000 | 3000 | ? |
| Demand (units) | 4500 | 8000 | 10000 | 1900 | 4000 | 3200 | ? |
The company is using MRP. The forecast for Skateboard ICE for the next coming six weeks:
| Week | w36 | w37 | w38 | w39 | w40 | w41 |
|---|---|---|---|---|---|---|
| Demand (forecast, units) | 750 | 750 | 750 | 900 | 950 | 1000 |
The company are buying all components from different suppliers. They are only making the wheel assembly and the assembly of the final skateboard, see also the diagram above.
| Item | Stock level | Value/item | Lot size | Lead time (weeks) |
|---|---|---|---|---|
| Skateboard ICE | 1800 | $250.00 | 2000 | 1 |
| Decks | 4000 | $20.00 | 1500 | 2 |
| Wheel assemblies | 1200 | $80.00 | Even hundreds | 1 |
| Bolts and Nuts, M6 | 25000 | $0.50 | 50000 | 1 |
| Risers | 30000 | $1.00 | 50000 | 1 |
| Wheels | 20000 | $8.00 | 40000 | 2 |
| Bearings | 40000 | $4.00 | 50000 | 2 |
| Trucks | 2000 | $19.00 | ? | 2 |
| Nuts, M8 | 50000 | $0.25 | 100000 | 1 |
The company has an ordering cost of $150/order and the inventory carrying cost is estimated to 10%.
1. If we use moving average with n=5, what is the forecast for Skateboard ICE for October?
2. If we use exponential smoothing with α=0.3, what is the forecast for Skateboard ICE for October?
3. Suppose it's now week 35. In what week should production of wheel assemblies start?
4. In relation to question 3c above, what quantity of wheel assemblies will be needed?
5. The company have had some problems with the supplier of the truck parts and therefore want to review the setup. But first they want to check how many truck parts they should order each time by calculating the Economic Order Quantity (EOQ).
What quantity of truck parts should the company order?
6. The supplier of the truck parts replies to the company that if they order in lots of 10 000 each time, they will get a 5 % discount.
What is the total cost for the truck parts if the company ordered 10 000 each time?
Skateboard ICE Deck (1) Wheel assembly (2) Bolts & Nuts M6 (8) Riser (2) Wheels (2) Bearings (4) Truck (1) Nuts M8 (4)
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Business Statistics A Decision Making Approach
Authors: David F. Groebner, Patrick W. Shannon, Phillip C. Fry
9th Edition
013302184X, 978-0133021844
