Theo Computers in Portland, ME sells personal computing devices. Chief among these are x86 chip powered devices. The parts for these devices are manufactured in Asia and are finally assembled in Taiwan before being shipped out to the US. The distributor in the US has a warehouse near Atlanta, GA. The total lead time once Theo Computers places an order used to be 4 weeks. Due to environmental conditions arising out of global politics and the recent pandemic, the once constant lead time is now showing a slight variation. Additionally, the demand for computers has increased over the past year with some variation. The lead time and demand data for each month are provided in the table below:

Month	Lead time for delivery	Demand (units)
1	4	20
2	5	23
3	6	25
4	3	21
5	4	26
6	4	23
7	6	18
8	6	15
9	7	40
10	5	14
11	4	45
12	7	23

The solution needs to be in an excel sheet

Using the data provided in the table, devise a continuous replenishment inventory model to answer the following questions:

1. What is the optimum order quantity if the holding cost per unit is 3 percent of its unit cost. Each computer costs $400 and retails for $600. Each time Theo Computers places an order, they need to spend $60 per transaction.

2. Assuming a service level of 95%, what would be the safety stock and re-order point given the data?

3. What would be the total annual cost considering holding and ordering costs? 

4. Plot the demand over time and provide your insight into whether the EOQ- continuous replenishment model is sufficient.

Answer rating: 100% (QA)

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