Description of this paper

For an item, the following data is available regarding the item's monthly forecasts for the upcoming months:

Description

solution


Question

For an item, the following data is available regarding the item's monthly forecasts for the upcoming months: Jan 628, Feb 884, Mar 2089, Apr 1650, May 1194, Jun 197, Jul 807, Aug 853, Sep 467, Oct 1384, Nov 552, Dec 697.;Since this item is purchased from a supplier, there is a $200 transaction cost for each order of the item. Holding cost for inventory of the item is 5% of the unit cost of the item. The full-price paid to the supplier is $10/per unit. Assume that demans for the item occurs throughout the year. THe average lead time of supply, counted as the time between when an order is placed to the supplier to the time whent he company recieves the order is 6 days. The company wants to maintains a 90% service level.;a) The item is a A-category item for the company. in this case, how much should the company be optimally ordering from the supplier and what is the amount of safety stock that the company should carry for this item?

 

Paper#32622 | Written in 18-Jul-2015

Price : $25
SiteLock