a) Find Economic Order Quantity. b) Find reorder point. c) How frequently theorder will be placed?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
TT Beverage Co. is a distributor of beer, wine and soft drinks product. From a
main warehouse located in Magusa, TRNC, TT supplies nearly 1000 retail stores with
beverage products. The beer inventory, which constitutes about 40% of the company’s
total inventory, averages approximately 50 000 cases. With an average cost per case of
approximately 8MU, TT estimates the value of its beer inventory to be 400 000 MU.
The warehouse manager has decided to do a detailed study of inventory costs
associated with Sergio Beer, the # 1 selling TT beer. The purpose of the study is to
establish the “how-much to order,” and “when to order” decisions for Segio Beer that
will result in the lowest possible cost.
The manager found that the demand is constant and 2 000 cases/week.The cost of
holding for the TT beer inventory is 25% of the value of the inventory.
(Note that definding the holding cost as a % of the value of the product is
convenient, because it is easily transferable to other products)
TT is paying 32 MU/order regardless of the quantity requested in the order.
Suppose TT is open 5 days each week, and the manufacturer of Sergio Beer guarantees
2-day delivery on any order placed.
a) Find Economic Order Quantity.
b) Find reorder point.
c) How frequently theorder will be placed?
d) Find the cycle time?
e) Calculate minimum total inventory cost.
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