After the most recent soccer World Cup, the Zuna hi-tech soccer ball has become famous and a best seller for sports fans across the globe.

The Zuna has a motion sensor that collects spatial positioning data in real-time for different purposes. Adike, the local store that owns the rights to sell the Zuna in Massachusetts, requested your help to define the optimal order quantity. The store manager Mr. Washington shared some helpful data:

- The monthly demand for the Zuna is steady at 1000 units per month.

- Each Zuna costs $136 and is sold by Adike for $228.

- Placing an order of the Zuna costs $900 per order.

- The annual holding cost rate of the Zuna is 8%.

- The manufacturer offers same-day delivery as it is located close to Adike.

What's the optimal order quantity for the Zuna?

Round your answer to the nearest integer.

 

Answer - 

 

 

Considering the optimal order quantity you just calculated, how many orders should Adike place in a year?

Round your answer to the nearest integer.

 

Answer - 

 

 

Question 2

 

 

Mr. Washington requested further support to identify and calculate the Zuna's costs. Use the rounded EOQ value calculated in Question 1 to answer this question.

Annual pipeline inventory cost:

 

Round your answer to the nearest integer.

  Answer - 

 

 

 

Annual cycle stock cost:

Round your answer to the nearest integer.

 

Answer - 

 

 

Annual purchasing cost:

Round your answer to the nearest integer.

 

Answer - 

 

 

Question 3

 

 

It's Monday early in the morning and you receive an unexpected phone call from Mr. Washington. Considering Adike is a great client for the Zuna, the manufacturer has offered a discount of 15% if Adike orders at least 2000 units.

What is Adike's new optimal order quantity considering the new discounted cost per unit?

Round your answer to the nearest integer.

 

Answer - 

 

 

You are now requested to determine what is the Total Relevant Cost of this operation. What types of costs should you consider as relevant in this operation?

 

Select the best ans

 

-Annual ordering cost

-Annual average cycle stock cost

-Annual pipeline inventory cost

-Annual purchasing cost

-None of the above

 

Answer - 

 

 

Question 4

 

The manufacturer will move their distribution center further away, and Adike now will have to incorporate lead time into their calculations.

Based on this information, which of the following statements is true?

 

Select the best ans

 

-If the replenishment process includes lead time variability, the purchasing cost will vary too.

-The Economic Order Quantity for the Zuna will change.

-The new lead time will increase the ordering cost.

-If Adike owns the inventory from the moment an order is placed, the new lead time will increase the pipeline inventory cost.

-None of the above

 

Answer -