Question: 5 . You have a continuous replenishment ( Q / r Type system ) and your current needs for a procured product from a Supplier
You have a continuous replenishment Qr Type system and your current needs for a procured product from a Supplier are as follows: Supplier Current Forecasted Demand units per day Demand uncertainty units per day Lead time fixed days Ordering shipping and handling costs $ per order Backorder policy None Min Order quantity units Required CSL Holding costs $ per unit per year days A What is your implied fill rate for this policy? What is should be your ordering policy in this case to minimize costs? What is the total inventory management cost of this one item? B The particular business is out for RFP Request for proposal with an alternative supplier Supplier who promises to supply the same product with reduced lead time, increased service, and improvement to total costs. Their proposal has the following terms: Supplier Proposed Lead time average days of lead time day day Ordering shipping and handling costs $ per order Backorder policy None Min Order quantity units Required CSL Holding costs $ per unit per year days What is should be your ordering policy in this case to minimize costs? What is the total inventory management cost of this one item under these terms, and should you accept the new proposal from Supplier Excel analysis is required to justify this decision.
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