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Please use Excel to calculate answers and show all work/formulas cells and complete all parts of the questions. Thanks! Question 3 (25 points) ATA Manufacturing
Please use Excel to calculate answers and show all work/formulas cells and complete all parts of the questions. Thanks! Question 3 (25 points) ATA Manufacturing Company hired a systems engineer to help select the best sourcing options for their raw materials and parts. One particular part has three sourcing options: Supplier 1 will sell the part for $5.10 per unit. Supplier 2 offers $4.90 each but requires orders larger than 2,500 units, and Supplier 3 offers $4.70 each but requires order quantities larger than 3,500 units. Accounting uses 20% interest rate for holding costs and estimates an ordering cost of $160 per order based on labor and shipping costs. Annual demand/usage forecast for this part is 25,000 units. The replenishment time for this part is one month. a) ( 8 points) Which is the best supplier to source from? b) ( 7 points) What is the optimal order quantity? c) (5 points) What is the reorder point? d) (5 points) What is the total expected annual inventory related costs for sourcing this part? Question 4 ( 25 points) You need to help a retailer in purchasing TV units. Ordering cost per order is $1000 and accounting is using a 20% interest rate for holding costs. The three TVs and their relevant information is given below: a) (12.5 points) You are told that the space allocated in the warehouse is 15,000 cubic feet. What is the optimal order quantity for each item? b) (12.5 points) You are told that the budget allocated for the inventory of these items should not exceed $200,000. What is the optimal order quantity for each item? (solve this problem independently from part a)
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