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In the inventory management simulation on MyOMLab, you received the following information at the beginning of the simulation. Amulet Cost Analysis To: DigiLife Store
In the inventory management simulation on MyOMLab, you received the following information at the beginning of the simulation. Amulet Cost Analysis To: DigiLife Store Managers From: Boden Hansen Re: Amulet Cost Analysis Good morning, store managers, Based on last year's numbers and expected trends into this year, our analysts have concluded the following about the Amulet: Cost of product: $95/unit The sales price of the Amulet is $200/unit. Supplier has confirmed that this will be the average per-unit cost when we place orders in whole box. Costs of ordering and delivery: $6,000 per order We have reached an agreement with the shipping service. All purchases will be billed at a flat rate of $6,000 for each order placed in the normal order cycle, which requires a 5 days lead time. The Accounting Department estimates the cost of holding inventory to be $1.35 per unit per day. This amount includes warehouse rental costs and insurance. Thanks, Boden Hansen VP of Sales for DigiLife You observed that the average daily demand during the past several weeks is 44 units. And you feel safe to have 2 days worth of stock as safety stock. Based on these knowledge, what should be the reorder point that is adjusted for safety stock? Round to the nearest whole unit if necessary.
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