Frito Bicycle Company (FBC), located in Seattle is a wholesale distributer of bicycles and bicycle parts. Formed in 1991 by University of Washington Professor Yong-Pia Frito. The firm's primary retail outlets are located within a 650-kilometer radius of the distribution centre. These retail outlets receive the order from FBC within 2 days after notifying the distribution centre, provided that the stock is available. However, if order is not fulfilled by the company, no backorder is placed; the retailers arrange to acquire their shipment from other distributers, and FBC loses the amount of business. The company distributes a broad assortment of bicycles. The most popular model, and the major source of revenue to the company, is the AirWing FBC receives all the models from an individual maker in China, and shipment takes as long as 4 weeks from the time an order is placed. With the cost of communicating, paperwork, and custom clearance included, FBC estimates that each time an order is placed, it incurs a cost of $65. The purchase price paid by FBC, per bicycle, is approximately 60% of the suggested retail price for all the style available, and the inventory carrying cost is 1% per month (12% per year) of the purchase price paid by FBC. The retail price (paid by the customer) for the AirWing is $170 per bicycle. FBC is interested in making an inventory plan for 2019. The firm wants to keep a 95 % service level with its customers to minimize the losses on the lost orders. The data collected for the past two years are summarized in the undermentioned tabular array. A forecast for AirWing model sales in 2019 has been developed and will be make an inventory plan for FBC. Month January February March April May June July August September October November December Total Discussion Questions: 2017 6 12 24 46 75 47 30 18 13 12 22 38 343 Demand for Airwing Model

1) Develop an inventory plan to help FBC. 2)discuss ROPs and total costs 2018 7 14 27 53 86 54 34 21 15 13 25 42 391 Forecast for 2019 8 15 31 59 97 60 39 24 16 15 28 47 439

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