Flat Screen QLED Television model QLED$-$TV$56$ are manufactured and

distributed by ElGee LTD as shown in figure$1.$ ElGee Manufactures and supplies

QLED$-$TV$56$ to its only customer, Kourts group of retailer from its finished goods

$($FG$)$ inventory at their Distribution Center $($DC$)$ in Tuas. The daily demand from

Kourts for QLED$-$TV$56$ is normally distributed with mean $75$ and standard

deviation of $15.$ The FG inventory is replenished through the ElGee Final

Assembly and Packaging plant which pulls semi$-$finished units from its Bulk

inventory as shown in Figure $1.$ The average lead time to pull semi$-$finished unit

of QLED$-$TV$56$ from its 'Bulk inventory' to $\text{'}$FG inventory' at DC through the

'final assembly' is $3$ days. Both the ElGee factory and the Kourts work $7$ days per

week throughout the year.

Figure $1$ Flow of $56"$ Flat Screen LCD TVs $($FS$-$TV$56)$ to the Kourts PTE Ltd

Assume that you have secured a job at ElGee and assigned the responsibility at their

manufacturing systems operations. The management has assigned first task for you

to evaluate possible strategies to control FG inventory of ElGee at Tuas DC through

response of the final assembly manufacturing. The management is concerned of

the rising inventory costs and frequent stock$-$outs, especially of the QLED$-$TV$56$

LCD TVs$.$ Assume that you have decided to carry out an analysis in order to

improve the manufacturing and service performance at ElGee and to make a set of

recommendations to management. You have identified FG inventory in Tuas DC

is controlled by a periodic review, base$-$stock policy and review period is $1$ week.

Figure $1$ shows the flow of QLED$-$TV$56$ LCD Television sets.

$[$You may use the values of the standard statistical tables with normal distribution

provided in appendix $1].$

$($a$)$ Briefly state why ElGee may be maintaining semi$-$finished units of inventory in the

form of bulk inventory. Name and outline the system of such operation.

$($b$)$ Briefly explain another possible policy that you may recommend to ElGee

management to control the inventory to achieve specific service level to their

customers.

$(1$ mark$)$

$($c$)$ In order to control the customer service, which is an important measurement, you

have decided to quantitatively define customer service. List two important

measures to quantitatively compute customer service level and briefly state how

these service levels differ.

$(2$ marks$)$

$($d$)$ Customer service can be improved by careful control of various parameters. Using

appropriate formulas, list four such parameters that you are able to influence in

order to improve the customer service level.

$(2$ marks$)$

$($e$)$ Based on existing inventory policy at ElGee LTD$,$ compute the base$-$stock B in FG

inventory in Tuas DC to assure a coverage probability $($Type I service$)$ of $90\%$ to

Kourts.

$(4$ marks$)$

$($f$)$

Compute the average number of stock$-$outs of QLED$-$TV$56$ TVs that Kourts may

expect per year, assuming $52$ weeks of operation per year.

$(4$ marks$)$

$($g$)$ Compute the average inventory level of the QLED$-$TV$56$ TVs at the FG inventory

of ElGee at Tuas DC under this policy.

$(2$ marks$)$

$($h$)$ Suppose you have recommended Tuas DC of ElGee to re$-$order a quantity sufficient

to meet one week of average demand whenever their total inventory quantity in DC

reaches to a level sufficient to meet one week of average demand. Assume the daily

demand from Kourts at the ElGee DC remains same. Assume both the Kourts and

the ElGee work $7$ days per week throughout the year. Name revised policy stated

in the above description.

$(1$ mark$)$

$($i$)$ What is the coverage probability $($Type $1$ service level$)$ provided to Kourts from the

ElGee DC by your revised policy? How many stock$-$outs might you expect per

year under this revised policy?

$(5$ marks$)$

$($j$)$ What will be the average inventory level of QLED$-$TV$56$ TVs at FG at DC under

this revised inventory control system?