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Alvarez and Takamine are two Japanese guitar companies that share a distribution and logistics hub for handling and shipping guitar orders to a major online retailer in North America. Uncorrelated Demand and related data profiles for each of four guitar products at the Osaka Global Distribution Center are listed below. Any shipment has a common order cost of $300 to the retailer's North American warehouse. Show the cost savings that could be achieved if packaging and shipping services could be aggregated for the four products listed below if the company spends $10,000 per year (every 12 months) to stage the facility for this function. Should the companies proceed with the plan to perform this type of service based on your analysis? Please report lot sizes, order frequency (flow time), and costs for both independent ordering and joint ordering conditions to justify your analysis.

Alvarez and Takamine are two Japanese guitar companies that share a distribution and logistics hub for handling and shipping guitar orders to a major online retailer in North America. Uncorrelated Demand and related data profiles for each of four guitar products at the Osaka Global Distribution Center are listed below. Any shipment has a common order cost of $300 to the retailer's North American warehouse. Show the cost savings that could be achieved if packaging and shipping services could be aggregated for the four products listed below if the company spends $10,000 per year (every 12 months) to stage the facility for this function. Should the companies proceed with the plan to perform this type of service based on your analysis? Please report lot sizes, order frequency (flow time), and costs for both independent ordering and joint ordering conditions to justify your analysis.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Alvarez and Takamine are two Japanese guitar companies that share a distribution and logistics hub for handling and shipping guitar orders to a major online retailer in North America. Uncorrelated Demand and related data profiles for each of four guitar products at the Osaka Global Distribution Center are listed below. Any shipment has a common order cost of $300 to the retailer's North American warehouse. Show the cost savings that could be achieved if packaging and shipping services could be aggregated for the four products listed below if the company spends $10,000 per year (every 12 months) to stage the facility for this function. Should the companies proceed with the plan to perform this type of service based on your analysis? Please report lot sizes, order frequency (flow time), and costs for both independent ordering and joint ordering conditions to justify your analysis. Forecast Demand (Monthly) Product-specific order cost Required annual rate of return (h=15%) Unit cost A2204 Prestige 10,000 $1000 Na $1500 RG550 Genesis 15,500 $1000 Na $700 Artist Pro 8,500 $1500 Na $1100 ES-445 Premier 3,650 $1750 Na $1800
Transcribed Image Text:Alvarez and Takamine are two Japanese guitar companies that share a distribution and logistics hub for handling and shipping guitar orders to a major online retailer in North America. Uncorrelated Demand and related data profiles for each of four guitar products at the Osaka Global Distribution Center are listed below. Any shipment has a common order cost of $300 to the retailer's North American warehouse. Show the cost savings that could be achieved if packaging and shipping services could be aggregated for the four products listed below if the company spends $10,000 per year (every 12 months) to stage the facility for this function. Should the companies proceed with the plan to perform this type of service based on your analysis? Please report lot sizes, order frequency (flow time), and costs for both independent ordering and joint ordering conditions to justify your analysis. Forecast Demand (Monthly) Product-specific order cost Required annual rate of return (h=15%) Unit cost A2204 Prestige 10,000 $1000 Na $1500 RG550 Genesis 15,500 $1000 Na $700 Artist Pro 8,500 $1500 Na $1100 ES-445 Premier 3,650 $1750 Na $1800
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