I have already completed #1. a. and got it right.
1. Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centres in different regions of the country. For one of its products, a high-speed Wi-Fi router priced at $350 per unit, the average weekly demand at each distribution centre is 75 units. Average shipment size to each distribution centre is 400 units, and average lead-time for delivery is 2 weeks. Each distribution centre carries 2 weeks' supply as safety stock but holds no anticipation inventory. a. On average, how many dollars of pipeline inventory will be in transit to each distribution centre? b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centres? 4. Northern Markets, Inc., is considering the use of ABC analysis to focus on the most critical SKUs in its inventory. Currently, there are approximately 20000 different SKUs, with a total dollar usage of $10000000 per year. a. What would you expect to be the number of SKUs and the total annual dollar usage for A items, B items, and C items at Northern Markets, Inc.? b. The following table provides a random sample of the unit values and annual demands of eight SKUs. Categorize these SKUs as A, B, and C items. 5. Yellow Press, Inc. buys paper in 1500kg rolls for printing. Annual demand is 2500 rolls. The cost per roll is 800 , andtheannualholdingcostis 15 percentofthecost. Eachordercosts 50 to process. a. How many rolls should Yellow Press, Inc, order at a time? b. What is the time between orders? 6. At Dot Com, a large retailer of popular books, demand is constant at 32000 books per year. The cost of placing an order to replenish stock is 10 , andtheannualcostofholdingis 4 per book. Stock is received 5 working days after an order has been placed. No backordering is allowed. Assume 300 working days a year. a. What is Dot Com's optimal order quantity? b. What is the optimal number of orders per year? c. What is the optimal interval (in working days) between orders? d. What is expected demand during the lead time? e. What is the reorder point? f. What is the inventory position immediately after an order has been placed? 1. a. On average, how many dollars of pipeline inventory will be in transit to each distribution center? Pipeline Inventory (DL)=dL Where: - DL is the pipeline inventory (in units) - d is the average demand for the item per period - L is the number of periods in the item's lead time - Average weekly demand (d)=75 units - Average lead-time (L)=2 weeks. Pipeline inventory (DL) for each distribution center: DL=dLDL=75 units / week 2 weeks =150 units Dollars of Pipeline Inventory per Distribution Center = DL Price per Unit Dollars of Pipeline Inventory per Distribution Center =150 units $350/ unit =$52,500 So, on average, there are $52,500 of pipeline inventory in transit to each distribution center