1. Calculate EOQ and ROP values for FY2021 based on your forecast from Question 2 and recommendations for their sock supplier and transportation company from Question 4 & 5. (TIP: The selected supplier may change your S and P values.) Give your final answer in full sock sets (ROUND UP to the next whole number). What are the expected costs for inventory management based on your decisions? How does this compare to companys current policy results from their current Q & ROP?

	Weight	Current Supplier	Alternative A	Alternative B
Unit Price 3-sock set	0.4	6.5 (1.2)	5.75 (0.4)	5 (0.8)
Order Cost, $/order	0.1	250 (0.3)	325 (0.1)	200 (0.2)
Defect Rate	0.3	2.8% - (0.9)	0.5% - (0.3)	0.5 (0.6)
Financial Condition	0.2	Good 3 (0.6)	Poor 1 (0.2)	Fair 2- (0.4)
Total Score	1	3	1	2

From the scorecard table above, we can see that the current supplier scores the highest out of all options and with the score of 3, should be used by Throx.

	Maersk (current)	USA Express (Alternative)
Cost of Stock	100 * 100 = $10000	10000
Freight (A)	1.35 * 100 (units) = $135	3.95 * 100 = $395
Damage (B)	100 (units) * 2.8% * $100 = 280	100 * 0.5 * 100 = $50
Blockage (C)	10000 * 10% * (4/52) = $76.92	10000 * 10% * (0.5/52) = $9.61
Total Cost (A + B + C)	$491.92	$454.61

Due to the difference in average time for the period, funds will be blocked between the difference.

USA Express offers a cheaper option, with lower damage rates and transit times. This allows for more leeway between errors and makes the option far better than Maersk.

Forecasting method chosen- Exponential Smoothing (Alpha = 0.8) = 25379 + 0.8 * (29975 25379) = 29055.8

Inventory Management Information The initial inventory for all sock styles combined at the beginning of FY 2021 is 2,250 units. You also have information on current costs, which includes: Order cost to Throx for an order placed with its current supplier, $/order = S = $250 Holding cost per set per per year= H = $1.75 The company currently pays $6.80 for each set of socks. =P The company uses a continuous review replenishment policy, and has IT systems in place that allow constant monitoring of key information. Last year, the company used an ROP under this policy of 1,900 units for all sock styles and an order quantity Q of 4,500 units for all sock styles. Inventory Management Information The initial inventory for all sock styles combined at the beginning of FY 2021 is 2,250 units. You also have information on current costs, which includes: Order cost to Throx for an order placed with its current supplier, $/order = S = $250 Holding cost per set per per year= H = $1.75 The company currently pays $6.80 for each set of socks. =P The company uses a continuous review replenishment policy, and has IT systems in place that allow constant monitoring of key information. Last year, the company used an ROP under this policy of 1,900 units for all sock styles and an order quantity Q of 4,500 units for all sock styles