Question: Cycle inventory assignment : please help! I need help with formulas and calculations for each problem. Please and thank you! TARGET: - Two popular coffee
Cycle inventory assignment: please help! I need help with formulas and calculations for each problem. Please and thank you!
TARGET: - Two popular coffee brands sold at Target stores are SB and EO - These coffees are shipped to Target DeKalb's Distribution center (DC) from their local warehouses - Cost of 12-oz coffees are $10 for SB coffee and $6 for EO coffee SUPPOSE: - Weekly demands at DeKalb DC are 300 packages for SB coffee and 500 packages for EO coffee (Assume DeKalb DC operates 52 weeks per year - Fixed cost of ordering any coffee is $1,000 per order (including transportation cost) - Additional ordering costs that depend on coffee brand are $300 for SB coffee and $300 for eo coffee - Inventory holding cost per package per year is 30% for the cost of coffee - Assume that there is not limit on truck capacity
1. What is the optimal lot size for EACH coffee if DeKalb DC replenishes two coffees jointly? 2. What is the cycle inventory of EACH coffee at DeKalb DC? 3. What is the total annual ordering cost of TWO coffees at DeKalb DC? 4. What is the annual holding cost of EACH coffee at DeKalb DC?
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