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for Modern Home appliances and include the accessories in their promotional materials (flyers, etc.). Modern Home having never sold accessories before, is excited about offering
for Modern Home appliances and include the accessories in their promotional materials (flyers, etc.). Modern Home having never sold accessories before, is excited about offering a rotisserie accessory for their conventional ranges. Modern Home would simply purchase the rotisserie from a supplier and re-sell it to the home improvement chain. Modern Home has researched alternative suppliers and the data provided below would be valid if Modern Home agrees to a one-year contract with the supplier. Modern Home has estimated that their relevant holding costs are 45% per year. Modern Home's sales department is confident that daily demand from the home improvement chain will be around 20 units with a standard deviation of 6 units per day. Uncertainty exists however on the delivery lead time from the suppliers. Modern Home desires a 99% service level for this promotional item (if the home improvement chain advertises the accessory, it should be available in inventory). Furthermore, they also request you to use the worst case scenario of the total delivery lead time as the basis for your safety stock quantities. Assume 365 operating days per year. Alternative 1 2 3 4 5 Winnipeg Los Angeles Winnipeg Shanghai Jakarta CDN USD CDN CNY IDR $62.00 $58.00 $62.00 $52.50 $48.50 Automated Semi-Automated Automated Manual Manual Supplier Location Payment Currency Unit Cost (CDN Equiv) Order Process Order Costs Transportation Method Average Lead Time (days) Lead Time Variation (days) $25.00 $125.00 $30.00 $350.00 $450.00 Truck Rail Air Cargo Ship & Rail Cargo Ship & Rail 3 12 2 45 65 -1 to +4 -3 to +8 -1 to +1 -10 to +40 -5 to +30 For each alternative, calculate the following: (7 marks) a. Economic Order Quantity b. Safety Stock Quantity c. Reorder Point d. Average Inventory Level e. Total Annual Costs Note: Include your formulas used - in Microsoft Excel, Press CTRL + '(grave accent) for at least one column. Activate the printing of the row and column headings in page setup so cell references can be followed. for Modern Home appliances and include the accessories in their promotional materials (flyers, etc.). Modern Home having never sold accessories before, is excited about offering a rotisserie accessory for their conventional ranges. Modern Home would simply purchase the rotisserie from a supplier and re-sell it to the home improvement chain. Modern Home has researched alternative suppliers and the data provided below would be valid if Modern Home agrees to a one-year contract with the supplier. Modern Home has estimated that their relevant holding costs are 45% per year. Modern Home's sales department is confident that daily demand from the home improvement chain will be around 20 units with a standard deviation of 6 units per day. Uncertainty exists however on the delivery lead time from the suppliers. Modern Home desires a 99% service level for this promotional item (if the home improvement chain advertises the accessory, it should be available in inventory). Furthermore, they also request you to use the worst case scenario of the total delivery lead time as the basis for your safety stock quantities. Assume 365 operating days per year. Alternative 1 2 3 4 5 Winnipeg Los Angeles Winnipeg Shanghai Jakarta CDN USD CDN CNY IDR $62.00 $58.00 $62.00 $52.50 $48.50 Automated Semi-Automated Automated Manual Manual Supplier Location Payment Currency Unit Cost (CDN Equiv) Order Process Order Costs Transportation Method Average Lead Time (days) Lead Time Variation (days) $25.00 $125.00 $30.00 $350.00 $450.00 Truck Rail Air Cargo Ship & Rail Cargo Ship & Rail 3 12 2 45 65 -1 to +4 -3 to +8 -1 to +1 -10 to +40 -5 to +30 For each alternative, calculate the following: (7 marks) a. Economic Order Quantity b. Safety Stock Quantity c. Reorder Point d. Average Inventory Level e. Total Annual Costs Note: Include your formulas used - in Microsoft Excel, Press CTRL + '(grave accent) for at least one column. Activate the printing of the row and column headings in page setup so cell references can be followed
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