In this problem, your company is a distributor of products. You serve as an inventorymanager for the regional distribution center (DC) here in the Atlanta area. In this role,you schedule the purchase and shipment of products from various suppliers inbound to theAtlanta DC. Once you receive the products at the DC, they are stored in inventory untilthey are picked, packed, and shipped outbound to your company’s downstream customersin response to orders.We again consider ordering and inventory management for products that each have adedicated supplier from which you order. Recently, you have noticed that demand for product 101 has become a bit more volatile andunpredictable. You decide that you want to start holding some safety stock and operate a(q, r) continuous review inventory policy. For this question, let’s assume that backorderingis no longer desirable 4. Assuming that lead time demand is approximately normally-distributed, compute yourreorder level r for this system assuming that you want no more than 5% of cycles toexperience stockouts (1 − pα = 0.05). What is the expected safety stock you keep inthis system? 5. Estimate the annual inventory cost of safety stock for both storage (using s) andcarrying cost (using rv). How does this annual cost compare to your annual pipelineinventory cost? 6. Suppose your supplier tells you that your lead time TL will increase by 50% since theyare having trouble with capacity. Does your pipeline inventory cost grow by 50%? Willyour safety stock grow by 50%?
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.
In this problem, your company is a distributor of products. You serve as an inventory
manager for the regional distribution center (DC) here in the Atlanta area. In this role,
you
Atlanta DC. Once you receive the products at the DC, they are stored in inventory until
they are picked, packed, and shipped outbound to your company’s downstream customers
in response to orders.
We again consider ordering and inventory management for products that each have a
dedicated supplier from which you order.
Recently, you have noticed that demand for product 101 has become a bit more volatile and
unpredictable. You decide that you want to start holding some safety stock and operate a
(q, r) continuous review inventory policy. For this question, let’s assume that backordering
is no longer desirable
reorder level r for this system assuming that you want no more than 5% of cycles to
experience stockouts (1 − pα = 0.05). What is the expected safety stock you keep in
this system?
carrying cost (using rv). How does this annual cost compare to your annual pipeline
inventory cost?
6. Suppose your supplier tells you that your lead time TL will increase by 50% since they
are having trouble with capacity. Does your pipeline inventory cost grow by 50%? Will
your safety stock grow by 50%?
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