Question: Hello, I need help setting this up using Excel for management science, What I am struggling the most with is seeing how this should play
Hello, I need help setting this up using Excel for management science, What I am struggling the most with is seeing how this should play out in excel. Screen shots of the answers in excel would be appreciated.
Case Maximart Sales The inventory manager of Maximart Sales wants to establish optimum ordering policies. Weekly demand for a particular item follows a normal distribution with a mean of units and a standard deviation of units. The supplier will sell Maximart up to units in an order at a price of $unit If Maximart orders between and units per order, they can get the product for $unit If Maximart is willing to order or more units with each order, they can get the product at $unit Maximart sells the item for $ per unit. It costs Maximart $ to place an order, and $ to hold a unit of inventory from one week to the next. The lead time between placing an order and receiving it inspected and ready for sale, is two weeks. When demand cannot be satisfied from stock, some customers are willing to accept back order, and wait another week or two for delivery. Other customers will not wait. The percentage of customers who are willing to accept a backorder varies uniformly between and Maximart estimates that they will lose $ in future profit from each lost sale. The current inventory policy is an order quantity of units, to take advantage of the quantity discounts. Further, the inventory manager has also set the reorder point at the average weekly demand, units. An order will be placed in any week for which the ending inventory is less than the reorder point, provided that there is not already an outstanding order from the previous week. a Simulate weeks of operation. Assume that the inventory at the beginning of week is units. Provide a breakdown of the average net profit and the average weekly costs for ordering, holding, lost future profits, and average total weekly costs. b Repeat part a with an order quantity of units and a reorder point of units. c Using the results from part a and b investigate a couple other combinations of reorder point and order quantity, in an attempt to determine the combination of the two that will lead to the greatest profit. Report your recommendations.
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