Buckshot Electronics is a chain of electronics superstores that is located throughout California, They have 15 locations concentrated primarily in heavily populated areas. They sell thousands of products made by hundreds of different manufacturers. Buckshot sells everything from phones, video cameras and video game consoles to large items like televisions Sony is one of their larger suppliers. They offer products in nearly every category Buckshot offers to its customers. In fact, Sony sells multiple cell phone models through Buckshot. One such model is the 09900 One of Buckshot's San Francisco stores is forecasted to sell about 7800 units of the 09900 in the coming year. This forecasted demand is about average in terms of Buckshots 15 other California locations. Presently they order 900 units of the 09900 every 6 weeks Each store fils weekly orders through its Sony Distributor for items like TV's, cameras, and of course, cell phones, in addition to many other tems. Orders for cell phones must be made in increments of 100 units. The distributor takes only one order per week, but Buckshot is not obligated to order everytem every week. That order is then shipped 2 days later to that individual Buckshot Electronics location by truck. Buckshor's Central Procurement is looking to save money by investigating order ses and subsequent order frequency. You are being asked to create a recommendation for order size and time between orders for the 9900 based on the numbers for this San Francisco location. Answer the questions that follow in order to create a detailed report for your supervisor Below are some the key figures important in your analysis: 29900 Wholesale Price 5 175.00 Q9900 Retail Price $ 299.00 Annual Per Unt Holding Costs are estimated at 35% of the wholesale cost of the 9900 Costs associated with each order include: Order Placement Fees (Documentation Network Support) $ 250.00 Delivery (Fuel, Driver, Truck, etc.) $ 125.00 Packaging $ 25.00 Receiving (Inspection, Documentation, etc.) $ 25.00 Labor (5 hours $10.00/hr) Stocking, Misc. $ 50.00 ONLINE Exercise #1 - KEY FALL 2020 Provide the following based on the data provided. 1. D. 2. M-350 X $175 - 4. S. 5. Weekly Demand D/S2 3. CE Using Present Lot Size (Q=9001 Presently orders are being placed every 6 Weeks. We find this by using the Time Between Orders formula OLI Provide the following based on the data provided. 1. D = 2. H = .350 x $175 = 3. CE 4. S = 5. Weekly Demand = D/52 = Using Present Lot Size (Q = 900) Presently orders are being placed every 6 Weeks. We find this by using the Time Between Orders formula. 6. How many orders per year are being placed annually? Do Not Round. (2 decimal places) According to the information supplied, what is the present annual inventory cost? (In other words, using their present lot size what is the annual inventory cost?) Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC). 7. DC = 8. AOC = 9. AHC = 10. TC = Using the Economic Order Quantity (Q=EOQ) 11. The calculated EOQ is (USE A WHOLE NUMBER, NO DECIMALS) 12. Using the calculated EOQ, How often will orders be placed? Weeks. DO NOT ROUND (Show 2 decimal places) According to the information supplied, what would be the annual inventory cost if they used the calculated EOQ? Also, separately identify the annual holding cost (AHC) and annual ordering cost (AOC). (2 decimal places each) 13. AHC = 14. AOC = 15. TC-. 16. If they could order the EOQ instead of 900, how much would this one store stand to save annually? (2 decimal places)
