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Added on: 0000-00-00 00:00:00Order Code: Question Task Id: 0
Internal Code: TV98
Case Study Assignment:
Task:
1.Inventory as a percent of overall business activity continues to decline. Explanatory factors include greater expertise in managing inventory, innovations in information technology, greater competitiveness in markets for transportation services, and emphasis on reducing cost through the elimination of non-value-adding activities.
2. As product lines proliferate and the number of SKUs increases, the cost of carrying inventory becomes a significant expense of doing business.
3. There are a number of principle reasons for carrying inventories. Types of inventory include cycle stock, work-in-process, inventory in transit, safety stock, seasonal stock, and anticipatory stock.
4. Principle types of inventory cost are inventory carrying cost, order/setup cost, expected stockout cost, and in-transit inventory carrying cost.
5. Inventory carrying cost is composed of capital cost, storage space cost, inventory service cost, and inventory risk cost. There are precise methods to calculate each of these costs.
6. Choosing the appropriate inventory model or technique should include an analysis of key differences that affect the inventory decision. These differences are determined by the following questions: (1) Is the demand for the item independent or dependent? (2) Is the distribution system based upon a push or pull approach? (3) Do the
inventory decisions apply to one facility or to multiple facilities?
Q1. Calculate Q, in order to determine the economic order quantity for the following conditions:
Annual Demand (R) = 3600 units
Cost per order (A) = $200
Cost of one unit of inventory (or per order value) (V)= $100
Inventory carrying cost (w)= 25% = 0.25
Q2. Describe the differences between a Buyer’s Market and a Seller’s Market (in terms of demand, supply and price)
Q3. Suggest some products that are available only via a ‘pull’ system.
Uploaded By : jack
Posted on : February 08th, 2018
Downloads : 1
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