Consider the following key assumptions: - Holding Costs for Inventory is 25% of COGS - Order Processing Costs are $500 per order. A. Using the EOQ methods outlined in the chapter, how many of Item 01UCl4 should an inventory planner order one time? B. Assume all conditions in Question A hold, except that the supplier now offers a quantity discount in the form of absorbing all or part of the order processing costs. For orders of 150 units or more, the supplier will absorb all the order-processing costs; for orders between 125 and 150 units, the supplier will absorb half. What is the new EOQ? (Please layout your answer in the form of a table identifying \# of orders per year, holding costs, ordering costs and total costs in order to identify your answer) C. Prof Brown has implemented a forecasting system that better predicts how many Smart Buy ProBook's will be sold each month. Forecasted sales for the next 12 months are depicted below. Given this new data Professor Brown has decided to supplement the EOQ by introducing a Reorder Point (ROP) so the warehouse knows when to place an order. He has leased his own warehouse and through effective supplier negotiations has eliminated ordering costs. Thus, he believes it will be more effective to only Smart Buy ProBook's inventory equal to his planned forecast plus a level of safety stock to cover forecast deviation. Using information from the textbook and Lecture calculate the safety stock and Reorder Pont (ROP). Assume the followino: Lead Time: 53 days (assume there is no variability) Desired Service Level: 95%, You will need to do research in order to determine the Z score. Safety Stock Formula: Safety stock =ZPC/T1forecanterer Where PC= TLT T1 - Represents the time increments the Standard Deviation, which for purposes of simplicity you can use 30 dyas. - Calculate the safety stock using the data provided above - Using the resources in the book and data from above calculate the Reorder Point. (Hint: ROP - Safety Stock + expected sales during the lead time interval. You may use a derivative of the mean or some other daily demand calculation for this purpose) D. Given the foreenst and the mean of the forecast calculate the coefficient of variation for this item's sales forecast. Consider the following key assumptions: - Holding Costs for Inventory is 25% of COGS - Order Processing Costs are $500 per order. A. Using the EOQ methods outlined in the chapter, how many of Item 01UCl4 should an inventory planner order one time? B. Assume all conditions in Question A hold, except that the supplier now offers a quantity discount in the form of absorbing all or part of the order processing costs. For orders of 150 units or more, the supplier will absorb all the order-processing costs; for orders between 125 and 150 units, the supplier will absorb half. What is the new EOQ? (Please layout your answer in the form of a table identifying \# of orders per year, holding costs, ordering costs and total costs in order to identify your answer) C. Prof Brown has implemented a forecasting system that better predicts how many Smart Buy ProBook's will be sold each month. Forecasted sales for the next 12 months are depicted below. Given this new data Professor Brown has decided to supplement the EOQ by introducing a Reorder Point (ROP) so the warehouse knows when to place an order. He has leased his own warehouse and through effective supplier negotiations has eliminated ordering costs. Thus, he believes it will be more effective to only Smart Buy ProBook's inventory equal to his planned forecast plus a level of safety stock to cover forecast deviation. Using information from the textbook and Lecture calculate the safety stock and Reorder Pont (ROP). Assume the followino: Lead Time: 53 days (assume there is no variability) Desired Service Level: 95%, You will need to do research in order to determine the Z score. Safety Stock Formula: Safety stock =ZPC/T1forecanterer Where PC= TLT T1 - Represents the time increments the Standard Deviation, which for purposes of simplicity you can use 30 dyas. - Calculate the safety stock using the data provided above - Using the resources in the book and data from above calculate the Reorder Point. (Hint: ROP - Safety Stock + expected sales during the lead time interval. You may use a derivative of the mean or some other daily demand calculation for this purpose) D. Given the foreenst and the mean of the forecast calculate the coefficient of variation for this item's sales forecast
