though these are posed as separate questions they all are formed into one and cannot be answered without the other.
FELINE Manufacturing Inc. (FMI) makes Widgets. They forecast the annual demand for Widgets to be 1,660 units. Quinn is a Purchasing Specialist for FMI and is responsible for ensuring FMI has sufficient inventory of the two key components required to make the Widgets: Fraggels and Lumpers. Fraggels Fraggels very costly ( $999 per unit). Each Widget requires three (3) Fraggels. Quinn has to determine the optimal quantity to order and when to place the order to ensure FMI minimizes its total annual inventory costs related to Fraggels. FMI purchases Fraggels from Fraggels Unlimited which is a global manufacturer of Fraggels with 12 manufacturing locations in the US. Each time Quinn places an order for Fraggels, Fraggels Unlimited has to reconfigure their process and dedicate personnel to make FMI's Fraggels. They charge FMI \$100 per order to set-up the process and a flat rate of $58 per order for shipping. FMI receives their order of Fraggels 21 days after placing the order. Because this is such a critical part, Quinn has decided to keep 4 days of stock on hand as safety stock. Lumpers Lumpers are significantly less expensive (\$15 per unit) though no less critical to the manufacture of Widgets. Each Widget requires twelve (12) Lumpers. FMI purchases Lumpers from a local manufacturer, Honeycomb Industries, who makes the part using a manual process which requires no set-up. Honeycomb Industries values the personal touch so their representative visits FMI every two weeks to meet with Quinn. While there, the representative counts the Lumpers in stock. Quinn then places an order with Honeycomb Industries for Lumpers. After the representative takes the order, it takes Honeycomb Industries three days to make the Lumpers, one day to package the order, and one day to deliver the order. Honeycomb charges $12 per order for shipping. Since Lumpers are so critical to the manufacture of Widgets and have a relatively low cost, Quinn has decided to keep 19 days of safety stock in case of fluctuations in demand. FMI Warehouse Operations FMI has an efficient warehouse operation. Below is a chart of the inventory holding cost allocation as a \% of cost per unit. 10. Calculate the Total Annual Costs (TC) for Fraggels and for Lumpers. Show your work. Round to nearest number based on guidance in table. (16 points) FMI hires a new Vice President of Operations. The VP wants to challenge the Inventory Specialists to "think outside the box" and "try new approaches." Quinn decides to change the inventory method they are using to calculate order quantity for Lumpers. 11. How many units of Lumpers should Quinn order at a time if they use the same inventory method that they used for Fraggels in question 8 ? The on-hand inventory of Lumpers is still 0 . Show your work. Do not round intermediate steps in the process. Round your final answers 2 decimals. (3 points) 12. Calculate the Total Annual Costs (TC) for Lumpers based on the quantity calculated and method used in question 11. Show your work. Do not round intermediate steps in the process. Round your final answers to the nearest whole number. (8 points) FELINE Manufacturing Inc. (FMI) makes Widgets. They forecast the annual demand for Widgets to be 1,660 units. Quinn is a Purchasing Specialist for FMI and is responsible for ensuring FMI has sufficient inventory of the two key components required to make the Widgets: Fraggels and Lumpers. Fraggels Fraggels very costly ( $999 per unit). Each Widget requires three (3) Fraggels. Quinn has to determine the optimal quantity to order and when to place the order to ensure FMI minimizes its total annual inventory costs related to Fraggels. FMI purchases Fraggels from Fraggels Unlimited which is a global manufacturer of Fraggels with 12 manufacturing locations in the US. Each time Quinn places an order for Fraggels, Fraggels Unlimited has to reconfigure their process and dedicate personnel to make FMI's Fraggels. They charge FMI \$100 per order to set-up the process and a flat rate of $58 per order for shipping. FMI receives their order of Fraggels 21 days after placing the order. Because this is such a critical part, Quinn has decided to keep 4 days of stock on hand as safety stock. Lumpers Lumpers are significantly less expensive (\$15 per unit) though no less critical to the manufacture of Widgets. Each Widget requires twelve (12) Lumpers. FMI purchases Lumpers from a local manufacturer, Honeycomb Industries, who makes the part using a manual process which requires no set-up. Honeycomb Industries values the personal touch so their representative visits FMI every two weeks to meet with Quinn. While there, the representative counts the Lumpers in stock. Quinn then places an order with Honeycomb Industries for Lumpers. After the representative takes the order, it takes Honeycomb Industries three days to make the Lumpers, one day to package the order, and one day to deliver the order. Honeycomb charges $12 per order for shipping. Since Lumpers are so critical to the manufacture of Widgets and have a relatively low cost, Quinn has decided to keep 19 days of safety stock in case of fluctuations in demand. FMI Warehouse Operations FMI has an efficient warehouse operation. Below is a chart of the inventory holding cost allocation as a \% of cost per unit. 10. Calculate the Total Annual Costs (TC) for Fraggels and for Lumpers. Show your work. Round to nearest number based on guidance in table. (16 points) FMI hires a new Vice President of Operations. The VP wants to challenge the Inventory Specialists to "think outside the box" and "try new approaches." Quinn decides to change the inventory method they are using to calculate order quantity for Lumpers. 11. How many units of Lumpers should Quinn order at a time if they use the same inventory method that they used for Fraggels in question 8 ? The on-hand inventory of Lumpers is still 0 . Show your work. Do not round intermediate steps in the process. Round your final answers 2 decimals. (3 points) 12. Calculate the Total Annual Costs (TC) for Lumpers based on the quantity calculated and method used in question 11. Show your work. Do not round intermediate steps in the process. Round your final answers to the nearest whole number. (8 points)
