Happy Henry’s car dealer sells an imported car called the EX123. Once everythree months, a shipment of the cars is made to Happy Henry’s. Emergencyshipments can be made between these three-month intervals to resupply the carswhen inventory falls short of demand. The emergency shipments require twoweeks, and buyers are willing to wait this long for the cars, but will generally goelsewhere before the next three-month shipment is due.From experience, it appears that the demand for the EX123 over a three-monthinterval is normally distributed with a mean of 60 and a variance of 36. The cost ofholding an EX123 for one year is $500. Emergency shipments cost $250 per carover and above normal shipping costs.a. How many cars should Happy Henry’s be purchasing every three months?b. Repeat the calculations, assuming that excess demands are back-ordered fromone three-month period to the next. Assume a loss-of-goodwill cost of $100 forcustomers having to wait until the next three-month period and a cost of $50 percustomer for bookkeeping expenses.c. Repeat the calculations, assuming that when Happy Henry’s is out of stock ofEX123s, the customer will purchase the car elsewhere. In this case, assume thatthe cars cost Henry an average of $10,000 and sell for an average of $13,500.Ignore loss-of-goodwill costs for this calculation
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.
Happy Henry’s car dealer sells an imported car called the EX123. Once every
three months, a shipment of the cars is made to Happy Henry’s. Emergency
shipments can be made between these three-month intervals to resupply the cars
when inventory falls short of demand. The emergency shipments require two
weeks, and buyers are willing to wait this long for the cars, but will generally go
elsewhere before the next three-month shipment is due.
From experience, it appears that the demand for the EX123 over a three-month
interval is
holding an EX123 for one year is $500. Emergency shipments cost $250 per car
over and above normal shipping costs.
a. How many cars should Happy Henry’s be purchasing every three months?
b. Repeat the calculations, assuming that excess demands are back-ordered from
one three-month period to the next. Assume a loss-of-goodwill cost of $100 for
customers having to wait until the next three-month period and a cost of $50 per
customer for bookkeeping expenses.
c. Repeat the calculations, assuming that when Happy Henry’s is out of stock of
EX123s, the customer will purchase the car elsewhere. In this case, assume that
the cars cost Henry an average of $10,000 and sell for an average of $13,500.
Ignore loss-of-goodwill costs for this calculation
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