151 Your company has the following inventory characteristics for a product. Demand Forecast 620 cases per...

    

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151 Your company has the following inventory characteristics for a product. Demand Forecast 620 cases per day Forecast Standard Deviation 74 cases per day Lead Time 12 days Carrying Cost Purchase Price Delivery Cost to Warehouse Ordering Cost Stockout Cost Desired probability of being in stock during lead time 32% per year $67 per case $12 per case $60 per order $124 per case P-96% You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. Create a recommended ROP inventory strategy. (10 points) Create a recommended PR inventory strategy (10points) What are the expected yearly costs (ordering, cycle and safety stock, COLS, and total) of the two strategies (ROP and PR)? (10 points) A B C D E F What are the expected service levels (fill rates) of the two strategies (ROP and PR)? (5 points) Which strategy (ROP or PR) do you recommend and why? (5 points) What would your ROP strategy be if there was also a Lead Time Standard Deviation of 0.45 weeks? (10 points) entation to management. [5] Your company has the following inventory characteristics for a product. Demand Forecast Forecast Standard Deviation Lead Time Carrying Cost Purchase Price Delivery Cost to Warehouse Ordering Cost Stockout Cost Desired probability of being in stock during lead time 620 cases per day 74 cases per day 12 days 32% per year $67 per case $12 per case $60 per order $124 per case P-96% You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. You are aying to determinowy for managing the products or nu scheduling the resupply of your warehouse. You have two basic options, I) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. Create a recommended ROP inventory strategy. (10 points) Create a recommended PR inventory strategy. (10 points) What are the expected yearly costs (ordering, cycle and safety stock, COLS, and total) of the two strategies (ROP and PR)? (10 points) A B C D What are the expected service levels (fill rates) of the two strategies (ROP and PR)? (5 points) Which strategy (ROP or PR) do you recommend and why? (5 points) What would your ROP strategy be if there was also a Lead Time Standard Deviation of 0.45 weeks? (10 points) Show all calculations set up as a presentation to management. E F 151 Your company has the following inventory characteristics for a product. Demand Forecast 620 cases per day Forecast Standard Deviation 74 cases per day Lead Time 12 days Carrying Cost Purchase Price Delivery Cost to Warehouse Ordering Cost Stockout Cost Desired probability of being in stock during lead time 32% per year $67 per case $12 per case $60 per order $124 per case P-96% You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. Create a recommended ROP inventory strategy. (10 points) Create a recommended PR inventory strategy (10points) What are the expected yearly costs (ordering, cycle and safety stock, COLS, and total) of the two strategies (ROP and PR)? (10 points) A B C D E F What are the expected service levels (fill rates) of the two strategies (ROP and PR)? (5 points) Which strategy (ROP or PR) do you recommend and why? (5 points) What would your ROP strategy be if there was also a Lead Time Standard Deviation of 0.45 weeks? (10 points) entation to management. [5] Your company has the following inventory characteristics for a product. Demand Forecast Forecast Standard Deviation Lead Time Carrying Cost Purchase Price Delivery Cost to Warehouse Ordering Cost Stockout Cost Desired probability of being in stock during lead time 620 cases per day 74 cases per day 12 days 32% per year $67 per case $12 per case $60 per order $124 per case P-96% You are trying to determine a new strategy for managing the product's inventory and scheduling the resupply of your warehouse. You have two basic options, 1) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. You are aying to determinowy for managing the products or nu scheduling the resupply of your warehouse. You have two basic options, I) a Reorder Point Plan or 2) a Periodic Review Plan. You know that you can install an inventory management system that would allow an automated ROP system to operate for $25,000 a year. You also know that if you use a PR inventory system, it costs you an additional $200 per order to confirm the inventory count. You can consider established your order size using either the EOQ or DDLT concept. Create a recommended ROP inventory strategy. (10 points) Create a recommended PR inventory strategy. (10 points) What are the expected yearly costs (ordering, cycle and safety stock, COLS, and total) of the two strategies (ROP and PR)? (10 points) A B C D What are the expected service levels (fill rates) of the two strategies (ROP and PR)? (5 points) Which strategy (ROP or PR) do you recommend and why? (5 points) What would your ROP strategy be if there was also a Lead Time Standard Deviation of 0.45 weeks? (10 points) Show all calculations set up as a presentation to management. E F

Answer rating: 100% (QA)

ANSWER A recommended ROP inventory strategy automated ROP system 25000 per year B recommended PR inventory strategy 200 per order EOQ or DDLT concept C expected yearly costs for ROP strategy ordering ... View the full answer