Question: Data given: average ending inventory = f $ 5 . 1 million average monthly sales = $300 ,000 . maximum yard capacity = 15,000 tonnes

Data given:

  1. average ending inventory = f $ 5 . 1 million
  2. average monthly sales = $300 ,000 .
  3. maximum yard capacity = 15,000 tonnes
  4. 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
  5. Within the following 24 hours, the raw material is ready to be transformed into finished products
  6. . Every tonne of unmet demand was estimated by the finance team to be associated with a cost equal to 70% of the material price.
  7. 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.
  8. 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:

  1. The companys goal was to minimise the chance of running out of raw material stock
  2. 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.
  3. task was to develop an inventory rationalisation model that the wholesaler

NB: i need calculations not theory steps

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