Asia Furnishing is a retailer of modular toilet products. Currently, the lead time for one of the products, the toilet door, is relatively high, at 5 weeks. The average demand for toilet doors is 200 per week. The standard deviation of demand during the lead time is 85 doors. The store plans to provide a service level of 99 per cent.

The store is looking for another supplier who can supply the doors in one week at the same price. Analyse how much safety stock can be reduced by moving to the new

supplier without reducing the 99 per cent cycle-service level.

The store hired a new manager who insists on using a probability distribution for the lead time of supply, instead of a fixed lead time. Based on the historical data from the present supplier, she estimated that the standard deviation of lead time is 1 week. How will the amount of safety stock change after including this information?

What should be the reorder level for the store?

A multi-national non-alcoholic drink manufacturer is formulating its business strategies for the next few years and is exploring the option of expanding based on the market outlook. It produces bottled water, juices and soft drinks. The company is trying to understand the future demand for these drinks to decide its future actions. The operations manager found the following link, which provides a worldwide market outlook for these drinks by volume in million litres: https://www.statista.com/outlook/cmo/non-alcoholic-drinks/worldwide#volume

The senior management of the MNC is doubtful about the estimates shown in the link and asked the operations manager to carry out forecasting to predict the volume of these three drinks for the year 2022. Examine the following situations:

The operations manager plans to use the moving average method as it is simple to compute but is unsure about the number of periods to use. Choose any three number of periods to forecast the volume of these three drinks for the year 2022. Explain the reason(s) for using those periods.

Decide the most appropriate number of periods if the moving average method is used for forecasting by computing the differences between the forecasts obtained by the moving average and the estimated sales volumes for the year 2022 shown in the link. Explain your decision.

If the operations manager chooses exponential smoothing to forecast the volume of these three drinks for the year 2022, what should be the best value of the smoothing constant to use? You may consider values of smoothing constant as 0.1, 0.2 and 0.3.

Assume that the historical data shown in the link is the actual sales volume of these drinks by volume. State any other assumptions needed for your computation.

Is it possible to determine the forecasts for the drinks for the year 2023 to 2025 using this method? If not, what method can be used to forecast the sales volume for the three

drinks from 2023 to 2025? Provide reasons for your answers.

The objective of the MonsoonSIM game that you played is to maximise the profit of your company by selling fruit juices at various retail stores. Your strategies were based on intuition and common sense in the first round of the game. In contrast, in the second round, you applied your knowledge and understanding of the inventory management concepts you learned in the course.

Review briefly the strategies you employed during the two rounds. If you have changed

your strategy in the second round, explain the reason for doing so.

Comment on the impact of these changes on the performance of your company. Is there

something you could have done differently to improve your performance?

What are the assumptions you made for developing your strategies? Discuss whether any information or data that were not available in the game would have helped in your

decision-making.

You may use statistics or graphs from the game for your analysis.