(c) Discuss how the postponement concept can be applied to Gina's bakery to reduce cycle stocks. State any possible issues that may arise while applying postponement. Question 1 (a) (b) Consider an organisation that experienced a stock-out or long customer waiting time for its product. Outline the inventory system it uses for this product. Based on what you have learned, describe ways to avoid possible stock-out or long customer waiting time. TS Kitchen Appliance Company has 10 different stores located in various parts of Singapore. Each store has an average demand of 300 units of waffle machines per month. Each unit costs $20. The shipping cost from the supplier in China is $500 each time. The holding cost per year is 15% for any item in the stock. (i) What is the EOQ for waffle machines? (ii) The supplier provides an all-unit quantity discount with a discount of 3% for orders between 3,500 units and 6,999 units. The discount is more, at 5%, for orders of 7,000 units or more. Solve for the best order quantity for this situation. What is the annual cost? Question 2 Gina starts a new home-based bakery business to sell hand-made toasts and biscuits. Each toast is sold at $6 and costs $2 to make. If she has any unsold toasts after 9 pm, they will be offered at $1 per toast until all remaining toasts are sold. Based on her experience, the daily demand for the toasts can only be 40, 60, 80, 100, or 120. The probabilities for different demand is shown below. Table 1: Probabilities of Demand for Toasts Demand Probability 40 15% 60 25% (a) (b) 80 100 120 20% 10% What is the probability when demand is 80? Calculate the number of toasts Gina should make to maximise the expected profit of selling toasts. If she decides to donate, all the toasts left after 9 pm, to a food bank, for free, how many toasts should she make to maximise the expected profit? Would you recommend Gina to adopt a pull system to manage its inventory of the flour, one of their main baking ingredient? Explain with supporting reasons.

(c) Discuss how the postponement concept can be applied to Gina's bakery to reduce cycle stocks. State any possible issues that may arise while applying postponement. Question 1 (a) (b) Consider an organisation that experienced a stock-out or long customer waiting time for its product. Outline the inventory system it uses for this product. Based on what you have learned, describe ways to avoid possible stock-out or long customer waiting time. TS Kitchen Appliance Company has 10 different stores located in various parts of Singapore. Each store has an average demand of 300 units of waffle machines per month. Each unit costs $20. The shipping cost from the supplier in China is $500 each time. The holding cost per year is 15% for any item in the stock. (i) What is the EOQ for waffle machines? (ii) The supplier provides an all-unit quantity discount with a discount of 3% for orders between 3,500 units and 6,999 units. The discount is more, at 5%, for orders of 7,000 units or more. Solve for the best order quantity for this situation. What is the annual cost? Question 2 Gina starts a new home-based bakery business to sell hand-made toasts and biscuits. Each toast is sold at $6 and costs $2 to make. If she has any unsold toasts after 9 pm, they will be offered at $1 per toast until all remaining toasts are sold. Based on her experience, the daily demand for the toasts can only be 40, 60, 80, 100, or 120. The probabilities for different demand is shown below. Table 1: Probabilities of Demand for Toasts Demand Probability 40 15% 60 25% (a) (b) 80 100 120 20% 10% What is the probability when demand is 80? Calculate the number of toasts Gina should make to maximise the expected profit of selling toasts. If she decides to donate, all the toasts left after 9 pm, to a food bank, for free, how many toasts should she make to maximise the expected profit? Would you recommend Gina to adopt a pull system to manage its inventory of the flour, one of their main baking ingredient? Explain with supporting reasons.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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