Questions1: Assignment 1: Forecasting & Inventory Control A furniture store made photo frames on its own workshop. Jassim the manager of the store decided to buy these photo frames from a local supplier instead of producing them in their workshop. He needs to take the advice from Ali "the manager of the warehouse department" and Ahmed "the manager of carpenter workshop department". Jassim knows that he mustfirstforecast the demand of year 2021 from the sales of previous years. The table below shows the sales for the photo frames of the last 11 years: Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sales 8500 8783 10500 11000 11456 11500 12000 12800 13070 13340 14300 2021 ? Warehouse Department: Ali is working on determining the order policy for the photo frames for year 2021. Ali agreed on buying these photo frames from a local supplier instead of producing them. Ali is aiming to minimize the total cost by focusing on two types of cost (Inventory holding cost and Order cost). Knowing that the yearly demand should be forecasted from the sales of previous years, the store should pay $13.5 for each unit, placing an order will cost $56 and the interest rate to hold rate is 15%. 1) You are required to help Jassim to perform forecasting to find demand of year 2021 by applying the flowing forecasting methods. a. Moving Average Forecast (3 periods moving average) b. Exponential Smoothing Forecast (a=0.8). Forecast of year 2010 is 8000. c. Trend-Adjusted Exponential Smoothing Forecast (a=0.8, B=0.2). 2) Which of the three forecasts methods for demand of year 2021 do you prefer? Why? 3) If Jassim decided to go for the Trend-Adjusted ExponentialSmoothing Forecast to find the demand of year 2021. Then, find the optimal value of a & B that minimize the MSE that gives forecast value of demand of year 2021? Questions2: 1) Develop an inventory system to help Ali to examine all the scenarios for each of the seven alternatives, and then select the best scenario that minimize the Total inventory costs. You can help him to find how much to order and when to order to meet customer demand in order to minimize the total inventory costs. a. Which scenario gives the minimum AH? b. Which scenario gives the minimum AO? c. Which scenario gives the minimum CC? d. Which scenario is the best, that minimizes the total inventory costs? Why? e. Apply the solver to find the number of orders that minimizes combined cost. knowing that number of orders should be between and 52. 2) Develop EOQ model to find the optimal value of quantity each order, optimal combined cost, and optimal number of orders per year. 3) Suppose that Ali decided to go for best policy, he wants to know what happens to combined cost if the following parameters change? a. What if the ordering cost changes? If the ordering cost goes up by $3? b. What if the ordering cost changes? if the ordering cost goes up 20%? c. What if holding cost changes by a factor of F20% increase"? d. What if the ordering cost changes by a factor of K "20% increase"? He knows that he must follow one of the following 7 alternatives that are suggested by the purchasing department: 1. Order every week 5. Order quarterly 2. Order every second week 6. Order semiannually 3. Order every month 7. Order every year 4. Order every second month Carpenter Workshop Department: Ahmed is making production plans for photo frames. Ahmed did not agree on buying these photo frames from a local supplier instead of producing them. Ahmed suggested that the carpenter workshop can continue produce these photo frames and no need to order them form a local supplier. Ahmed is aiming to minimize the total cost by focusing on two types of cost (Inventory holding cost and Setup cost). Knowing that the yearly demand should be forecasted from the sales of previous years, the rate of production is 7,550 photo frames per month, the setup costis $52, the cost of each unit is $13.25, and the inventory holding percentis the same 15%. 4) Develop EOQ Model with price breaks discount quantities to help the manger to examine the following quantities, and decide which quantity gives the lowest total cost? 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 Kowing that the price breaks discount quantities are as following: Unit Cost C IF Q2000 $ 13.00 Questions 3: 1) Ahmed is wondering whether EPL or optimal EPL gives the lowest cost. a. Develop Economic Production Lot (EPL) size model to help Ahmed to find how much to produce and when to produce to meet customers demand in order to minimize the total inventory costs. b. Find the optimal values of production Lot size, number of lots, and combined cost C. Which case is the best? EPL or optimal EPL? Questions: Which suggestion is the best in term of total cost? Ali "buying photo frames from a local supplier" or Ahmed "producing photo frames in carpenter workshop"? Why? Questions1: Assignment 1: Forecasting & Inventory Control A furniture store made photo frames on its own workshop. Jassim the manager of the store decided to buy these photo frames from a local supplier instead of producing them in their workshop. He needs to take the advice from Ali "the manager of the warehouse department" and Ahmed "the manager of carpenter workshop department". Jassim knows that he mustfirstforecast the demand of year 2021 from the sales of previous years. The table below shows the sales for the photo frames of the last 11 years: Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sales 8500 8783 10500 11000 11456 11500 12000 12800 13070 13340 14300 2021 ? Warehouse Department: Ali is working on determining the order policy for the photo frames for year 2021. Ali agreed on buying these photo frames from a local supplier instead of producing them. Ali is aiming to minimize the total cost by focusing on two types of cost (Inventory holding cost and Order cost). Knowing that the yearly demand should be forecasted from the sales of previous years, the store should pay $13.5 for each unit, placing an order will cost $56 and the interest rate to hold rate is 15%. 1) You are required to help Jassim to perform forecasting to find demand of year 2021 by applying the flowing forecasting methods. a. Moving Average Forecast (3 periods moving average) b. Exponential Smoothing Forecast (a=0.8). Forecast of year 2010 is 8000. c. Trend-Adjusted Exponential Smoothing Forecast (a=0.8, B=0.2). 2) Which of the three forecasts methods for demand of year 2021 do you prefer? Why? 3) If Jassim decided to go for the Trend-Adjusted ExponentialSmoothing Forecast to find the demand of year 2021. Then, find the optimal value of a & B that minimize the MSE that gives forecast value of demand of year 2021? Questions2: 1) Develop an inventory system to help Ali to examine all the scenarios for each of the seven alternatives, and then select the best scenario that minimize the Total inventory costs. You can help him to find how much to order and when to order to meet customer demand in order to minimize the total inventory costs. a. Which scenario gives the minimum AH? b. Which scenario gives the minimum AO? c. Which scenario gives the minimum CC? d. Which scenario is the best, that minimizes the total inventory costs? Why? e. Apply the solver to find the number of orders that minimizes combined cost. knowing that number of orders should be between and 52. 2) Develop EOQ model to find the optimal value of quantity each order, optimal combined cost, and optimal number of orders per year. 3) Suppose that Ali decided to go for best policy, he wants to know what happens to combined cost if the following parameters change? a. What if the ordering cost changes? If the ordering cost goes up by $3? b. What if the ordering cost changes? if the ordering cost goes up 20%? c. What if holding cost changes by a factor of F20% increase"? d. What if the ordering cost changes by a factor of K "20% increase"? He knows that he must follow one of the following 7 alternatives that are suggested by the purchasing department: 1. Order every week 5. Order quarterly 2. Order every second week 6. Order semiannually 3. Order every month 7. Order every year 4. Order every second month Carpenter Workshop Department: Ahmed is making production plans for photo frames. Ahmed did not agree on buying these photo frames from a local supplier instead of producing them. Ahmed suggested that the carpenter workshop can continue produce these photo frames and no need to order them form a local supplier. Ahmed is aiming to minimize the total cost by focusing on two types of cost (Inventory holding cost and Setup cost). Knowing that the yearly demand should be forecasted from the sales of previous years, the rate of production is 7,550 photo frames per month, the setup costis $52, the cost of each unit is $13.25, and the inventory holding percentis the same 15%. 4) Develop EOQ Model with price breaks discount quantities to help the manger to examine the following quantities, and decide which quantity gives the lowest total cost? 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 Kowing that the price breaks discount quantities are as following: Unit Cost C IF Q2000 $ 13.00 Questions 3: 1) Ahmed is wondering whether EPL or optimal EPL gives the lowest cost. a. Develop Economic Production Lot (EPL) size model to help Ahmed to find how much to produce and when to produce to meet customers demand in order to minimize the total inventory costs. b. Find the optimal values of production Lot size, number of lots, and combined cost C. Which case is the best? EPL or optimal EPL? Questions: Which suggestion is the best in term of total cost? Ali "buying photo frames from a local supplier" or Ahmed "producing photo frames in carpenter workshop"? Why