Question: Data given: average ending inventory = f $ 5 . 1 million average monthly sales = $300 ,000 . maximum yard capacity = 15,000 tonnes
Data given:
- average ending inventory = f $ 5 . 1 million
- average monthly sales = $300 ,000 .
- maximum yard capacity = 15,000 tonnes
- procedure required that a raw-material order is placed before 10:00 am Monday, allowing for 6 full days before delivery to the main yard
- Within the following 24 hours, the raw material is ready to be transformed into finished products
- . Every tonne of unmet demand was estimated by the finance team to be associated with a cost equal to 70% of the material price.
- Inventory storage costs were not directly accounted for in the above process, although the company confirmed that the cost of capital used to procure stock could be estimated at 10% per year or 0.19% per week.
- opening stock of ammonia inventory on Monday 06.09.2021 was 2,858.877 tonnes
| Period | Week | Demand (t) |
| 1 | 01-08-2022 | 300.3 |
| 2 | 08-08-2022 | 272.0 |
| 3 | 15-08-2022 | 442.4 |
| 4 | 22-08-2022 | 266.9 |
| 5 | 29-08-2022 | 345.5 |
| 6 | 05-09-2022 | 210.0 |
| 7 | 12-09-2022 | 389.3 |
| 8 | 19-09-2022 | 399.8 |
| 9 | 26-09-2022 | 492.4 |
| 10 | 03-10-2022 | 740.0 |
| 11 | 10-10-2022 | 442.8 |
| 12 | 17-10-2022 | 561.2 |
| 13 | 24-10-2022 | 465.2 |
| 14 | 31-10-2022 | 631.8 |
| 15 | 07-11-2022 | 422.7 |
| 16 | 14-11-2022 | 433.7 |
| 17 | 21-11-2022 | 599.8 |
| 18 | 28-11-2022 | 656.0 |
| 19 | 05-12-2022 | 722.2 |
| 20 | 12-12-2022 | 619.4 |
| 21 | 19-12-2022 | 763.4 |
| 22 | 26-12-2022 | 621.2 |
| 23 | 02-01-2023 | 738.3 |
| 24 | 09-01-2023 | 851.5 |
| 25 | 16-01-2023 | 901.4 |
| 26 | 23-01-2023 | 899.2 |
| 27 | 30-01-2023 | 608.9 |
| 28 | 06-02-2023 | 720.4 |
| 29 | 13-02-2023 | 757.5 |
| 30 | 20-02-2023 | 776.3 |
| 31 | 27-02-2023 | 912.1 |
| 32 | 06-03-2023 | 736.3 |
| 33 | 13-03-2023 | 849.1 |
| 34 | 20-03-2023 | 843.6 |
| 35 | 27-03-2023 | 727.0 |
| 36 | 03-04-2023 | 821.0 |
| 37 | 10-04-2023 | 767.4 |
| 38 | 17-04-2023 | 886.5 |
| 39 | 24-04-2023 | 902.5 |
| 40 | 01-05-2023 | |
| 41 | 08-05-2023 | |
| 42 | 15-05-2023 | |
| 43 | 22-05-2023 |
Goals:
- The companys goal was to minimise the chance of running out of raw material stock
- He also needed to determine what critical points needed to be evaluated before coming up with any kind of inventory management policy, and what planning horizon was most suited for this type of problem.
- task was to develop an inventory rationalisation model that the wholesaler
NB: i need calculations not theory steps
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