Juan has a profitable web business of selling T-shirts priced at $25 each. His demand is pretty steady throughout the year (his website is up and running 365 days a year), approximately normally distributed with a mean of 30 T-shirts/day and a standard deviation of 10 T-shirts/day. He has a supplier in China that charges him $5 per T-shirt and a flat rate of $150 every time he places an order. Orders take exactly 50 days to arrive by container ship. His calculates his annual per unit holding costs at 20% of the wholesale cost of T-shirts. a) What type of inventory management problem is this? Explain your answer. i) Newsvendor (single period) model ii) EOQ model with continuous demand distribution iii) EOQ model with discrete demand distribution b) Calculate how many T-shirts he should order from his China supplier at a time. c) Calculate the level at which he should reorder T-shirts from China to experience at most a 10% chance of a stocking out.
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.
Juan has a profitable web business of selling T-shirts priced at $25 each. His demand is pretty steady throughout the year (his website is up and running 365 days a year), approximately normally distributed with a mean of 30 T-shirts/day and a standard deviation of 10 T-shirts/day. He has a supplier in China that charges him $5 per T-shirt and a flat rate of $150 every time he places an order. Orders take exactly 50 days to arrive by container ship. His calculates his annual per unit holding costs at 20% of the wholesale cost of T-shirts.
a) What type of inventory management problem is this? Explain your answer. i) Newsvendor (single period) model ii) EOQ model with continuous demand distribution iii) EOQ model with discrete demand distribution
b) Calculate how many T-shirts he should order from his China supplier at a time.
c) Calculate the level at which he should reorder T-shirts from China to experience at most a 10% chance of a stocking out.
d) Fill in: When inventory drops to _________ T-shirts, Juan should place an order for __________ more T-shirts.
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