Athens Inc. uses a purchased component in its own assembly. Production takes 52 weeks per year and
Question:
Athens Inc. uses a purchased component in its own assembly. Production takes 52 weeks per year and consumption of the component is evenly distributed throughout the year. The purchase price is $23. Inventory carrying cost is 20%. The administration cost for each purchase is $85. The component can only be purchased with regular tens (ie 10, 20, 30, 40, etc.).
The request is as follows:
Week | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Demand (pcs) | 19 | 24 | 21 | 18 | 23 | 14 | 31 | 19 | 21 | 20 | 21 | 21 1. Athens Inc. He wants to calculate the Economic Order Quantity. How much will they order each time, let's say the 12-week demand above represents the entire year. Calculate the Economic Order Quantity (EOQ). 2. Athens Inc. uses the materials planning functionality of its ERP systems to determine when orders to the component supplier will be released. Let's say the safety stock level is 20 units and there are 100 units in stock when production starts in week 1. Delivery time is 2 weeks from the supplier of the component. In what week should the first order to the supplier of the component be released? |
Operations And Supply Chain Management
ISBN: 9780357131695
2nd Edition
Authors: David A. Collier, James R. Evans