Problem Set 4

Answer the three (3) questions on Inventory Management.Submit your answers in either a Word® document or as an Excel® file. If your preference is Excel®, use multiple worksheets (tabs), with an answer to each question on a separate worksheet.

Principles of Supply Chain Management LGMT 444

Problem Set 4

1.      Apply ABC analysis for the following items:

 

Item Number

Item Cost
($)

Annual Usage
(Unit)

A111

4.0

2,500

B111

1.5

7,500

C111

0.25

4,000

D111

2.0

1,300

E111

55

850

F111

5.5

2,000

G111

0.75

800

H111

1.7

6,000

I111

24

1,100

J111

4

3,500

K111

3.7

1,900

L111

16

1,200

 

 

 

2.     
Weekly demand for a product
is 250 units with a standard deviation of 60 units (assume 52 weeks per year).
Lead-time is 3 weeks. Calculate the safety stock and the reorder point for 98
percent service level.

 

 

 

3.      Using the data below, find the EOQ, the total
annual cost associated with the economic order quantity, the reorder point,
number of orders per year and the time between orders.

 

Annual
Demand

15,600
units

Weeks
Operating

52
weeks/year

Set
up Cost

$60/order

Holding
rate

20%

Unit
cost

$80
/unit

Lead-Time

5
weeks