'The Nissan Leaf is a compact five$-$door hatchback electric car manufactured by Nissan and intro duced in Japan and the United States in December $2010.$ The first vehicles sold in North America were produced at Nissan's plant in Oppama, Japan, which started production on October $22,2010$

Commercial U$.$S$.$ production began in January $2013$ at Nissan's manufacturing facility in Smyrna

'Tennessee. 'The manufacturing plant was modified with a USS$1\mathrm{.}4$ billion loan grant by the US De$-$

partment of Energy to allow it to produce the Nissan Leaf and its advanced batteries. The Smyrna plant was onginally expected to produce up to $150\mathrm{.}000$ vehicles and $200.$U$00$ battery packs per year

In Canada, the $2011$ Nissan Leaf was priced at CAS$38\mathrm{.}395\mathrm{.}00$ and came with additional equipment useful for coker weather, such as heated front and rear seats, steering wheel, and outside mirrors. Other modifications included a battery heater system and an HVAC duct to the real seating area. The initial roll$-$out was limited to selected markets and in limited quantities. Fleet deliveris in Canada began on July $29,2011,$ and deliveries to individuals began in late September

$2011.$

Nissan produces all of its own battery packs. Since the beginning of $2013,$ the $24$ kWh batteries that Nissan uses in all its vehicles have been produced at Nissan's new battery plant in Smyrna.

Each battery pack consists of $48$ modules, and each module contains four cells, for a total of $192$ cells. Nevertheless, the critical electrode material is still being shipped from Japan. The number

of sales in the past $12$ months is as follows: $949.919.1066.1635.1573.1635.804.775.804.15791293,$ and $1802$ units.

Nissan e$-$NV$200$

The Nicon NV$200$ is a licht commercial vehicle and is also available in the passenger car version

European models of NV$200$ were produced in Japan until production started at Nisan's plant in Barcelona in November $2009.$ Based on the Nissan NV$200,$ the Nissan e$-$NV$200$ concept all$-$electric van was introduced at the $2012$ North American Auto Show in Detroit. The e$-$N V$200$ has a $24$ kWH

battery pack that is expected to have a ranse similar to the Nissan Leaf of aboroximately $117$ km

The pre$-$production version of the all$-$electric utility van c$-$NV$200$ was unveiled at the $2013$ Tokyo

Auto Show. The production version of the c$-$NV$200$ was unveiled at the $2014$ Geneva Motor Show Nissan started production in May $2014$ in Barcelona, and sales of the electric van in Europe started in June as scheduled. Pricine in Germany starts at $625\mathrm{.}058($CAS$38\mathrm{.}6611$

Analysis

Answer the following questions

$1.(5$ points$)$ Nissan orders TunnelFire all$-$weather brand tires for its Nissan Leafs, where & tires

$(1$ setl are used ver car. Nissan bavs $$190$ for each tire and estimates that the annual holdind

cost is $35\%$ of each tire's value. It costs approximately $$550$ to place an order $($clerical costs$)$

Nissan currently orders $2\mathrm{.}000$ sets of tires per order. Use the demand$/$sale observations in the

past $12$ months to estimate the annual demand.

$($a$)$ Determine all relevant costs for the current order auantity $($denoted as COO$).$

$($b$)$ Then, calculate the EOQ as well as the number of orders Nissan will place per year.

Please round up your answer.

$($e$)$ Use the values in Part $($b$)$ to calculate the total cost when using the EOQ.

$($d$)$ Compare each of the cost components when using the EOQ with the corresponding cost components when using the COQ.

$($e$)$ Which order quantity should Nissan use?

$2.(10$ points$)$ As mentioned in the text, before the Nissan plant in Smyma. Tennessee, started

to produce the Nissan Leaf they were imported from Javan. Although cars are now assembled

in the IS some components are still imported from Janan. Assume that the lead time from

Javan is $3$ davs for shipping. Recall that the critical electrode material is imported from

Japan. Also, each car requires one battery pack and each battery pack consists of $192$ cells Issume that each "unit" the amount reouired for an individual cell in the battery pack

hae o volio of &$6$ and an assnriatod carrvine coct of $256$ Marenvor asuumo that Niscam io

responsible for holding the inventory since the units are shipped from Japan. We suppose that

placing an order costs $$11500.$ Assume that Nissan wants to provide a $95\%$ service level for its assembly plant because any

ing components will force the assembly lines to come to a

halt. We assume the demand for Nissan Leafs is normally distributed. Use the demand$/$sale

bservations from the past $12$ months to estimate the mean and the standard deviation of the

demand. For simplicity, assume there are $360$ days per year, $30$ days per month, and $7$ days

$($a$)$ What is the optimal order quantity?

$($b$)$ What is the aboroximate time between orders in davs?

$($c$)$ What is the total annual inventory cost?

$($d$)$ What is the reorder point?

Assume that the unit price can be decreased by $20$ cents if $200\mathrm{.}000$ to $299,999$ units are ordered