Question
The manager of NTUC Fairprice at Bukit Timah Plaza, Mr Lim, found out that the demand for Milo tetra packs has been declining over the
The manager of NTUC Fairprice at Bukit Timah Plaza, Mr Lim, found out that the demand for Milo tetra packs has been declining over the last few months. So, he decided to reduce the order quantity for the drinks from its manufacturer Nestle. (i) Explain how various inventory-related costs will change if the order size decreases. (ii) The supermarket is planning to carry a newly introduced drink from another manufacturer along with the existing product Milo. Which product do you think the supermarket should hold more safety inventory? Why? (iii) As a supermarket manager, how would you go about evaluating the criticalness of an inventory shortage? In your answer, you should identify the questions need to be addressed. (b) Determine what are dependent and independent demand in the following scenarios: (i) a fast food restaurant selling burgers, fries etc. (ii) a bicycle manufacturer
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