Tim O'Hare is the distribution manager for Consolidated, Inc. Major builders can order from Consolidated, Inc....

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Tim O'Hare is the distribution manager for Consolidated, Inc. Major builders can order from Consolidated, Inc. two products: door hardware and casters. Since the construction industry goes through cycles, the demands from the builders vary from one month to another throughout the year, but it is known with certainty: PRODUCT Demand by PERIODS (in 1000 units) 6 7 1 2 3 4 8 9 10 11 12 DOOR HW. 85 110 140 65 120 70 110 50 60 30 40 110 100 120 140 100 40 50 5 50 120 30 75 130 CASTERS 70 The cost parameters for each one of these SKUs varies according to the data given below: Purchase Cost (in 1000 units) Ordering Cost Holding cost % per period (for 1000 units) SKU DOOR HW. CASTERS $20 $20 $15 $20 2% 2% To determine a cost-effective replenishment schedule, typically, Tom O'Hare uses a heuristic. However, the Consolidated, Inc.'s managers may challenge him on the effectiveness of his heuristic. Hence, one important issue is to show the cost-effectiveness of the heuristic by comparing it with the other solutions. 1. Construct a replenishment schedule and calculate the associated costs using the fixed EOQ method. 2. Construct a replenishment schedule and calculate the associated costs using the lot-for-lot method. 3. Construct a replenishment schedule and calculate the associated costs using the Least Unit Cost Method. 4. Construct a replenishment schedule and calculate the associated costs using the Part Period Balancing Method. 5. Construct a replenishment schedule and calculate the associated costs using the Silver- Meal Heuristic. 6. What is your ordering policy recommendation? Tim O'Hare is the distribution manager for Consolidated, Inc. Major builders can order from Consolidated, Inc. two products: door hardware and casters. Since the construction industry goes through cycles, the demands from the builders vary from one month to another throughout the year, but it is known with certainty: PRODUCT Demand by PERIODS (in 1000 units) 6 7 1 2 3 4 8 9 10 11 12 DOOR HW. 85 110 140 65 120 70 110 50 60 30 40 110 100 120 140 100 40 50 5 50 120 30 75 130 CASTERS 70 The cost parameters for each one of these SKUs varies according to the data given below: Purchase Cost (in 1000 units) Ordering Cost Holding cost % per period (for 1000 units) SKU DOOR HW. CASTERS $20 $20 $15 $20 2% 2% To determine a cost-effective replenishment schedule, typically, Tom O'Hare uses a heuristic. However, the Consolidated, Inc.'s managers may challenge him on the effectiveness of his heuristic. Hence, one important issue is to show the cost-effectiveness of the heuristic by comparing it with the other solutions. 1. Construct a replenishment schedule and calculate the associated costs using the fixed EOQ method. 2. Construct a replenishment schedule and calculate the associated costs using the lot-for-lot method. 3. Construct a replenishment schedule and calculate the associated costs using the Least Unit Cost Method. 4. Construct a replenishment schedule and calculate the associated costs using the Part Period Balancing Method. 5. Construct a replenishment schedule and calculate the associated costs using the Silver- Meal Heuristic. 6. What is your ordering policy recommendation?

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