Umket Corporation's contract with the home improvement chain includes relevant accessories, meaning that the home improvement...

 

 

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Umket Corporation's contract with the home improvement chain includes "relevant accessories", meaning that the home improvement chain will stock relevant accessories for Umket Corporation appliances and include the accessories in their promotional materials (flyers, etc.). Umket Corporation, having never sold accessories before, is excited about offering a rotisserie accessory for their conventional ranges. Umket Corporation would simply purchase the rotisserie from a supplier and re-sell it to the home improvement chain. Umket Corporation has researched alternative suppliers and the data provided below would be valid if Umket Corporation agrees to a two-year contract with the supplier. Umket Corporation has estimated that their relevant holding costs are 25% per annum. The sales department is confident that daily demand will be around 10 units with a standard deviation of 6 per day. Umket Corporation does not want to disappoint this important retailer so they are requesting a 99% target service level be used for this item. Assume a 365 day year. For each alternative, calculate the following: (5 marks) Supplier Location Payment Currency Unit Cost (CDN Equiv) Order Process Order Costs Method of Transport Normal Lead Time (days) Vancouver San Francisco USD CDN $54.00 $50.00 Semi- Automated Automated $30.00 $80.00 Truck Rail 3 8 Vancouver CDN $54.00 Automated $50.00 Air 2 a. Economic Order Quantity b. Safety Stock Quantity d. Average Inventory Level e. Total Annual Cost Beijing CNY $48.00 Manual $340.00 Ship & Rail 60 Hanoi VND $46.00 Manual $630.00 Ship & Rail 90 c. Reorder Point Note: Do not round calculated values. For formatting purposes, display only one decimal for quantities, two decimals for dollar values. Include your formulas used in Microsoft Excel, Press CTRL + (grave accent). Activate the printing of the "row and column headings" in page setup. (1 mark) Which alternative would you recommend? Why? (4 marks) Item # R-38756 D-12983 G-16728 R-95437 G-67158 R-12487 R-27598 G-49756 R-47617 G-34796 D-17654 G-46872 D-53247 D-75195 G-29437 Item Description Range drawer Dishwasher frame Insulated wire (300V) Range lamp fixture (optional) Circuit board control panel Range frame Range handle Plastic tie (locking) Range element - 6" rack support / slide Water pump 1" phillips screw Dishwasher rack (upper/lower) Backflow valve 2" PVC tubing Unit of Measure PCS PCS FEET PCS PCS PCS PCS PCS PCS PCS PCS PCS PCS PCS METRE Unit Cost Annual Volume $26.00 $130.00 $0.37 $85.00 $90.00 $185.00 $4.25 $0.02 $14.00 $0.40 $34.00 $0.03 $21.00 $4.00 $0.50 8,450 12,200 24,300 320 14,000 8,300 8,500 185,000 27,500 70,400 13,480 250,000 24,800 57,500 25,200 Item # Unit Cost Order Cost Supplier Lead Time Desired Service Level 75-4538-9 $2.80 $60.00 6 95% 55-4687-2 $5.20 $84.00 5 90% 87-3719-5 $9.00 $40.00 12 99% Umket Corporation's contract with the home improvement chain includes "relevant accessories", meaning that the home improvement chain will stock relevant accessories for Umket Corporation appliances and include the accessories in their promotional materials (flyers, etc.). Umket Corporation, having never sold accessories before, is excited about offering a rotisserie accessory for their conventional ranges. Umket Corporation would simply purchase the rotisserie from a supplier and re-sell it to the home improvement chain. Umket Corporation has researched alternative suppliers and the data provided below would be valid if Umket Corporation agrees to a two-year contract with the supplier. Umket Corporation has estimated that their relevant holding costs are 25% per annum. The sales department is confident that daily demand will be around 10 units with a standard deviation of 6 per day. Umket Corporation does not want to disappoint this important retailer so they are requesting a 99% target service level be used for this item. Assume a 365 day year. For each alternative, calculate the following: (5 marks) Supplier Location Payment Currency Unit Cost (CDN Equiv) Order Process Order Costs Method of Transport Normal Lead Time (days) Vancouver San Francisco USD CDN $54.00 $50.00 Semi- Automated Automated $30.00 $80.00 Truck Rail 3 8 Vancouver CDN $54.00 Automated $50.00 Air 2 a. Economic Order Quantity b. Safety Stock Quantity d. Average Inventory Level e. Total Annual Cost Beijing CNY $48.00 Manual $340.00 Ship & Rail 60 Hanoi VND $46.00 Manual $630.00 Ship & Rail 90 c. Reorder Point Note: Do not round calculated values. For formatting purposes, display only one decimal for quantities, two decimals for dollar values. Include your formulas used in Microsoft Excel, Press CTRL + (grave accent). Activate the printing of the "row and column headings" in page setup. (1 mark) Which alternative would you recommend? Why? (4 marks) Item # R-38756 D-12983 G-16728 R-95437 G-67158 R-12487 R-27598 G-49756 R-47617 G-34796 D-17654 G-46872 D-53247 D-75195 G-29437 Item Description Range drawer Dishwasher frame Insulated wire (300V) Range lamp fixture (optional) Circuit board control panel Range frame Range handle Plastic tie (locking) Range element - 6" rack support / slide Water pump 1" phillips screw Dishwasher rack (upper/lower) Backflow valve 2" PVC tubing Unit of Measure PCS PCS FEET PCS PCS PCS PCS PCS PCS PCS PCS PCS PCS PCS METRE Unit Cost Annual Volume $26.00 $130.00 $0.37 $85.00 $90.00 $185.00 $4.25 $0.02 $14.00 $0.40 $34.00 $0.03 $21.00 $4.00 $0.50 8,450 12,200 24,300 320 14,000 8,300 8,500 185,000 27,500 70,400 13,480 250,000 24,800 57,500 25,200 Item # Unit Cost Order Cost Supplier Lead Time Desired Service Level 75-4538-9 $2.80 $60.00 6 95% 55-4687-2 $5.20 $84.00 5 90% 87-3719-5 $9.00 $40.00 12 99%

Answer rating: 100% (QA)

Calculation of Annual sales income of each item Annual sales income Annual demand x Unit cost Item c... View the full answer