An Inventory Game to Introduce Variable Demand - The new flying broomstick Nimbus 2020 has just come out! Quidditch fans and broomstick retail stores alike are excited. As the owner of Quidditch Supplier of Miami you need to decide on how many broomsticks to order, you want to keep up with demand and avoid stockouts, but you don't want overly high holding costs from leftover inventory. Since this is a new product, you can't really know what the demand might be from month to month. Suppose you have historical data (see table below) about the monthly demand from the last two times new broomsticks have been introduced: Month Jul Aug Sep Oct Nimbus Nimbus Nimbus 2012 2016 2020 20 24 35 44 59 49 79 100 MGT-303 - Azadi Chapter 12: In class notes and problems Nov 42 51 Dec 83 81 Jan 34 68 Feb 41 62 Mar 38 33 You purchase each broomstick from your supplier at 20 Galleons (6) each. You sell them for 300. Ordering costs are 606, and you can't order more than once per month. If you stockout, it costs 76 per unit short. There are no backorders, as customers will just go get their broom from your competitor. Any broomsticks leftover at the end of the month cost lct in holding. In this exercise we simulate choosing renlenishment or are on a month hur month hani 4 You purchase each broomstick from your supplier at 20 Galleons (6) each. You sell them for 300. Ordering costs are 604, and you can't order more than once per month. If you stockout, it costs 7d per unit short. There are no backorders, as customers will just go get their broom from your competitor. Any broomsticks leftover at the end of the month cost lc in holding. In this exercise we simulate choosing replenishment orders on a month-by-month basis where we don't know the demand for the month until after we've made our order for the month. Your instructor will tell you the demand for each month only after you've placed your order for the month. Nimbus 2020 July Aug Sept Oct Nov Dec Jan Feb March 1 Beginning Inventory 0 Line (5) from previous month 2 Order Quantity 3 Number Available =(1) +(2) Demand 5 Ending Inventory max[(3) -(4), 0] Revenue from Sales 6 - 30 min[(3) (4)] 7 Ordering costs O if you did not order, or 60 + 20 (2) if you did 8 Shortage costs - 7 *max (4) - (3), 0) 9 Holding Costs - 1 "(5) 10 Total Costs (7) + (8) + (9) 11 Monthly Profit -6-(10) 12 Annual Running Profit Focus P8 English (United State March will tell you the demand for each month only after you've placed your order for the month Nimbus 2020 July Aug Sept Oct Nov Dec JAR Feb 1 Beginning inventory 0 Line (5) from previous mouth 2 Order Quantity 3 Number Available -02) Demand 5 Ending Inventory max (3) - 1.0 Revenue from Sie 6-30 min 4) 1 7 Ordering costs O if you did not order, or 60 + 20 (2) if you did 8 Shortage costs 7 max() -0,01 9 Holding Costs 1 (5) 10 Total Costs 74309 11 Monthly Profit (6 10) 12 Annual Running Profit previous month's (12) this month's Done Inventory Game spreadsheet Gro... Sheet2 Sheet3 Inventory Game July Aug Sept Oct Nov Dec Jan Feb March 1 0 D 05 15 3 2 4 1.5 2 22 40 53 91 48 81 53 49 37 3 22 40 33.5 91 495 84 55 53 38.5 4 22 395 54 95 165 X2 51 515 35.5 5 D OS 0 13 3 1.5 6 660 1185 1605 2685 1395 2460 1530 1545 1065 7 Nimbus 2020 Beginning Inventory cs from previous Order Quantity Number Available 01 (2) Demand Ending Inventory max[(3) - (4), Revenue from sales 30 min(MI Ordering costs 60 + 20 (2) if ordered, O otherwise Shortage costs max[(4-3).03 Holding costs (5) Total Costs (7) + (8) Monthly Prolit - (6) -(10) Annual Running Profit previous month's (12) + this month's (11) 500 260 1120 IND 1020 1680 1120 1040 800 8 0 0 15 0 0 0 0 0 0 9 0 OS 1 2 4 1.5 3 10 500 860.5 1123.5 1818 1023 1682 1124 10415 803 11 160 3245 481.5 8035 372 ?7 406 503.5 262 12 160 484.5 966 17095 21415 2919.5 3325.5 3829 4091 An Inventory Game to Introduce Variable Demand - The new flying broomstick Nimbus 2020 has just come out! Quidditch fans and broomstick retail stores alike are excited. As the owner of Quidditch Supplier of Miami you need to decide on how many broomsticks to order, you want to keep up with demand and avoid stockouts, but you don't want overly high holding costs from leftover inventory. Since this is a new product, you can't really know what the demand might be from month to month. Suppose you have historical data (see table below) about the monthly demand from the last two times new broomsticks have been introduced: Month Jul Aug Sep Oct Nimbus Nimbus Nimbus 2012 2016 2020 20 24 35 44 59 49 79 100 MGT-303 - Azadi Chapter 12: In class notes and problems Nov 42 51 Dec 83 81 Jan 34 68 Feb 41 62 Mar 38 33 You purchase each broomstick from your supplier at 20 Galleons (6) each. You sell them for 300. Ordering costs are 606, and you can't order more than once per month. If you stockout, it costs 76 per unit short. There are no backorders, as customers will just go get their broom from your competitor. Any broomsticks leftover at the end of the month cost lct in holding. In this exercise we simulate choosing renlenishment or are on a month hur month hani 4 You purchase each broomstick from your supplier at 20 Galleons (6) each. You sell them for 300. Ordering costs are 604, and you can't order more than once per month. If you stockout, it costs 7d per unit short. There are no backorders, as customers will just go get their broom from your competitor. Any broomsticks leftover at the end of the month cost lc in holding. In this exercise we simulate choosing replenishment orders on a month-by-month basis where we don't know the demand for the month until after we've made our order for the month. Your instructor will tell you the demand for each month only after you've placed your order for the month. Nimbus 2020 July Aug Sept Oct Nov Dec Jan Feb March 1 Beginning Inventory 0 Line (5) from previous month 2 Order Quantity 3 Number Available =(1) +(2) Demand 5 Ending Inventory max[(3) -(4), 0] Revenue from Sales 6 - 30 min[(3) (4)] 7 Ordering costs O if you did not order, or 60 + 20 (2) if you did 8 Shortage costs - 7 *max (4) - (3), 0) 9 Holding Costs - 1 "(5) 10 Total Costs (7) + (8) + (9) 11 Monthly Profit -6-(10) 12 Annual Running Profit Focus P8 English (United State March will tell you the demand for each month only after you've placed your order for the month Nimbus 2020 July Aug Sept Oct Nov Dec JAR Feb 1 Beginning inventory 0 Line (5) from previous mouth 2 Order Quantity 3 Number Available -02) Demand 5 Ending Inventory max (3) - 1.0 Revenue from Sie 6-30 min 4) 1 7 Ordering costs O if you did not order, or 60 + 20 (2) if you did 8 Shortage costs 7 max() -0,01 9 Holding Costs 1 (5) 10 Total Costs 74309 11 Monthly Profit (6 10) 12 Annual Running Profit previous month's (12) this month's Done Inventory Game spreadsheet Gro... Sheet2 Sheet3 Inventory Game July Aug Sept Oct Nov Dec Jan Feb March 1 0 D 05 15 3 2 4 1.5 2 22 40 53 91 48 81 53 49 37 3 22 40 33.5 91 495 84 55 53 38.5 4 22 395 54 95 165 X2 51 515 35.5 5 D OS 0 13 3 1.5 6 660 1185 1605 2685 1395 2460 1530 1545 1065 7 Nimbus 2020 Beginning Inventory cs from previous Order Quantity Number Available 01 (2) Demand Ending Inventory max[(3) - (4), Revenue from sales 30 min(MI Ordering costs 60 + 20 (2) if ordered, O otherwise Shortage costs max[(4-3).03 Holding costs (5) Total Costs (7) + (8) Monthly Prolit - (6) -(10) Annual Running Profit previous month's (12) + this month's (11) 500 260 1120 IND 1020 1680 1120 1040 800 8 0 0 15 0 0 0 0 0 0 9 0 OS 1 2 4 1.5 3 10 500 860.5 1123.5 1818 1023 1682 1124 10415 803 11 160 3245 481.5 8035 372 ?7 406 503.5 262 12 160 484.5 966 17095 21415 2919.5 3325.5 3829 4091