ASSIGNMENT DESCRIPTION

This assignment focuses on inventory management activities. You will learn to determine the flow of goods from raw material to customer order levels.

This assignment is worth 25% of your final grade. Question 1, 2, and 4 are worth 5% each. Question 3 is worth 10%. This assignment is due on Day 7.

ASSIGNMENT STEPS

To complete this assignment:

In this assignment, your challenge is to determine annual demand for each raw material, determine the economic Order Quantities (EOQ), and Re-order Levels.

In a restaurant, we are selling three types of pizzas and demands for each product, and product structures have been given in the attached table.

Please find an attached Excel file for your review.

Please answer the following questions:

1. Determine demands for each raw material.
2. Determine the EOQ for each individual raw material.
3. Explain why these EOQs are acceptable or not acceptable?
4. Determine ROP levels based on lead time and the demand.
5. Once complete, submit in the submission folder.
6. Please view the rubric here.

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ANNUAL DEMAND VEGGIE PIZZA PEPPERONI PIZZA CHEESE PIZZA 300000 250000 360000 PRODUCTS' STRUCTURE RAW MATERIALS VEGGIE PIZZA PEPPERONI PIZZA CHEESE PIZZA FLOUR (gr) 25 25 25 YEAST (gr) 5 5 5 VEGETABLE OIL (mlt) 5 5 5 SUGAR (gr) 2 2 2 SALT (gr) 5 5 5 KETCHUP SAUCE (mlt) 25 25 25 CHEESE (gr) 30 30 40 SWEET PEPPER (gr) 10 0 0 GARLIC (gr) 10 0 0 TOMATO (gr) 20 0 0 MUSHROOM (gr) 20 5 0 PEPPERONI (gr) 0 20 0 PRICE per Kg FLOUR 2 0.1 0.4 YEAST 20 0.12 4 VEGETABLE OIL 2.5 0.09 0.5 SUGAR 1 0.09 0.2 SALT 1 0.05 0.2 KETCHUP SAUCE 1.5 0.05 0.3 CHEESE 10 0.1 2 SWEET PEPPER 1 0.1 0.35 GARLIC 2.5 0.12 0.5 TOMATO 1 0.11 0.35 MUSHROOM 3 0.14 0.35 PEPPERONI 20 0.1 4 Assume that we have 365 days in a year SHIPMENT COST per each delivery ANNUAL HOLDING COST per unit

LEAD TIME (days) Shelf Life 7 100 7 40 10 120 10 200 15 120 20 40 2 7 1 3 1 20 1 3 1 3 3 10