Current Situation Data: Calculate:

CURRENT ORDER QUANTITY not specified UNITS Reorder Point ROP units

SALES PER YEAR D $36500$ UNITS Safety Stock SS units

LEAD TIME t $20$ DAYS Econ. Order Qty EOQ units

SAFETY STOCK SS $5$ DAYS OF SALES Rounded to Full Pallets FPOQ units

SS UNITS Same, in pallets FPOQ pallets

UNIT PRICE U $10$ $ Rounded to Full Trailers FTOQ pallets

INV. CARRYING COST Ci $10\%$ Same, in units FTOQ units

ORDERING COST PER ORDER Co $12$ $ Whole # of orders per year using FTOQ above AO

CONSTRAINTS: SHIP ONLY IN FULL PALLETS AND IN FULL TRAILERS Annual Ordering Cost using whole # of orders AOC $

FULL PALLET FP $20$ UNITS Annual Carrying Cost of Cycle Stock ACCcs $

FULL TRAILER FT $22$ PALLETS Annual Carrying Cost of Safety Stock ACCss $0$ $

Total Annual Costs $($using whole # of orders$)$ TAC$1$ $

New Situation Data:

MIN. ORDER QUANTITY MOQ $60$ PALLETS Minimum order quantity MOQ units

UNITS Rounded to Full Trailers FTOQ pallets

ORDERING COST PER ORDER Co $10$ $ Same, in units FTOQ $0$ units

Whole # of orders per year using FTOQ above AO

Assumption: $24/7/365$ operation Annual Ordering Cost using whole # of orders AOC $

Annual Carrying Cost of Cycle Stock ACCcs $

Annual Carrying Cost of Safety Stock ACCss $0$ $

Total Annual Costs $($using whole # of orders$)$ TAC$2$ $

Difference in Total Costs between New and Old

Situation

$\backslash$Delta TAC$=$ TAC$2-$

TAC$1$ $

Difference in Total Costs between New and Old

Situation

$\backslash$Delta TAC$/$TAC$1$

$*100\%*$

$*-$ Manager to change the supplier if worse than $10\%$

cells to calculate

cells with formulas; do not change