Assignment

$1.$ Your first task is to evaluate the inventory position of each tree. The farm does not keep any backorder information, so the only data you have is For Sale and In$-$Field quantities: Think about For Sale as on$-$hand trees, and In$-$Field as on$-$order trees. Calculate the inventory position using two measures: the actual number of trees and an estimate of the years of supply, for each tree. The current year forecast can be used to estimate yeads of supply. Answer this question by creating two columns that capture this information.

$2.$ Assume that it takes $(1)/(2)$ year to obtain the starter twigs and plant a batch of trees, and another $2(1)/(2)$ years to grow the trees. How many trees should management consider a minimum level $($a reorder point$)$ that would trigger starting the cycle to grow a type of tree? In answering this question, assume that management wants to have a $90$ percent service probability while going through each planting cycle. Answer this question relative to the number of trees and years of supply for the trees.

$3.$ Management does not use an economic criterion, like EOQ, to determine planting quantity. Rather, they have stated that they want to plant a minimum of a year's worth of high$-$volume and two years' worth of low$-$volume trees at a time. The idea is to order the year's supply target plus an amount needed to make up the difference between the minimum and current inventory position. For those tree types that are below the minimum level $($calculated in part $2),$ calculate a proposed planting quantity. Create an additional column in the table for the proposed planting quantity.

$4.$ Suggest a process for how you think management should use the new ordering information you have created in the first three parts of this exercise. Issues related to how often this decision should be considered and how the planting quantity might be adjusted should be considered in your process. Also, what additional criteria should be considered in making these decisions?