Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Teremana Tequila (TT) is a wholesale distributor of tequila founded by Dwayne Johnson aka The Rock. The company has three types of tequila and the

image text in transcribed

Teremana Tequila (TT) is a wholesale distributor of tequila founded by Dwayne Johnson aka The Rock. The company has three types of tequila and the most popular is called the Reposado, a major source of revenue for TT. Teremana Tequila receives all the tequila bottles from Mexico, and shipment takes as long as four weeks from the time order is placed. With the cost of communication, paperwork, and custom clearances included, Teremana Tequila estimates that each time an order is placed it costs $65. The purchase price paid by TT, per bottle, is roughly 60% of the suggested retail price. The inventory carrying cost is 1% per month, of the purchase price paid by Teremana Tequila. The retail price (paid by the customer) for Reposado is $170 per bottle. 2021 7 14 27 Month January February March April May June July August September October November December 2020 6 12 24 46 75 47 30 18 53 86 54 Forecast (2022) 8 15 31 59 97 60 39 24 16 15 28 47 34 13 21 15 13 25 42 12 22 38 OM cil Teremana Tequila is making an inventory plan for 2022 considering its nascency. In 2022, TT will strive to maintain a 97% service level in order to attract more customers. 2020 and 2021 demand data are available and Teremana Tequila has developed a forecast for the year 2022 (see table above). Answer the following questions: a) Develop an inventory plan for TT for 2022 (hint: compute the order quantity using the information provided in the problem statement). b) Calculate the ROP and the total inventory costs for 2022. c) Discuss/Analyze the inventory behavior with the above plan (from a) and b)], comparing it to previous years. What do you observe? d) What are your recommendations for TT considering the data and the computed inventory plan, ROP, and costs? Teremana Tequila (TT) is a wholesale distributor of tequila founded by Dwayne Johnson aka The Rock. The company has three types of tequila and the most popular is called the Reposado, a major source of revenue for TT. Teremana Tequila receives all the tequila bottles from Mexico, and shipment takes as long as four weeks from the time order is placed. With the cost of communication, paperwork, and custom clearances included, Teremana Tequila estimates that each time an order is placed it costs $65. The purchase price paid by TT, per bottle, is roughly 60% of the suggested retail price. The inventory carrying cost is 1% per month, of the purchase price paid by Teremana Tequila. The retail price (paid by the customer) for Reposado is $170 per bottle. 2021 7 14 27 Month January February March April May June July August September October November December 2020 6 12 24 46 75 47 30 18 53 86 54 Forecast (2022) 8 15 31 59 97 60 39 24 16 15 28 47 34 13 21 15 13 25 42 12 22 38 OM cil Teremana Tequila is making an inventory plan for 2022 considering its nascency. In 2022, TT will strive to maintain a 97% service level in order to attract more customers. 2020 and 2021 demand data are available and Teremana Tequila has developed a forecast for the year 2022 (see table above). Answer the following questions: a) Develop an inventory plan for TT for 2022 (hint: compute the order quantity using the information provided in the problem statement). b) Calculate the ROP and the total inventory costs for 2022. c) Discuss/Analyze the inventory behavior with the above plan (from a) and b)], comparing it to previous years. What do you observe? d) What are your recommendations for TT considering the data and the computed inventory plan, ROP, and costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing

Authors: Timothy J. Ph.D. Robertson, Jack C.; Louwers

9th Edition

0072906952, 9780072906950

More Books

Students also viewed these Accounting questions