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USE EXCEL The company typically uses opportunity cost as its largest component of cost to maintain the material (it is an annual interest of 25%). However, in the case of this product, at that cost is added a cost of $0.03 per unit per week for requiring specialized handling. Part (a) Determine the inventory control system that ensures there will be no shortage of material in stock 95% of the cycles. Part (b) Determine the inventory control system that ensures that 95% of customers they find the material they are looking for direct from inventory. Part (c) Determine the inventory control system that minimizes the average inventory system costs.

USE EXCEL The company typically uses opportunity cost as its largest component of cost to maintain the material (it is an annual interest of 25%). However, in the case of this product, at that cost is added a cost of $0.03 per unit per week for requiring specialized handling. Part (a) Determine the inventory control system that ensures there will be no shortage of material in stock 95% of the cycles. Part (b) Determine the inventory control system that ensures that 95% of customers they find the material they are looking for direct from inventory. Part (c) Determine the inventory control system that minimizes the average inventory system costs.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Identify and calculate the most appropriate inventory management system for the scenario below. We have a component, Component XYZ100, which is regularly consumed and its lifetime is quite long compared to the rate at which the product is moving. The demand for the product is found in the monthly demand table. The product is purchased and processed at a cost of $1.32 per unit and has a 30% profit margin. Shipping and handling is typically $75 regardless of order size. Once the order is placed, it takes 3 months to receive it. Month 1 2 3 4 5 6 7 8 9 10 11 12 Demand 341 385 309 389 355 317 394 331 322 368 406 385 Month 13 14 15 16 17 18 19 20 21 22 23 24 Demand 280u 389 408 383 374 376 379 379 391 412 252 397 USE EXCEL The company typically uses opportunity cost as its largest component of cost to maintain the material (it is an annual interest of 25%). However, in the case of this product, at that cost is added a cost of $0.03 per unit per week for requiring specialized handling. Part (a) Determine the inventory control system that ensures there will be no shortage of material in stock 95% of the cycles. Part (b) Determine the inventory control system that ensures that 95% of customers they find the material they are looking for direct from inventory. Part (c) Determine the inventory control system that minimizes the average inventory system costs.
Transcribed Image Text:Identify and calculate the most appropriate inventory management system for the scenario below. We have a component, Component XYZ100, which is regularly consumed and its lifetime is quite long compared to the rate at which the product is moving. The demand for the product is found in the monthly demand table. The product is purchased and processed at a cost of $1.32 per unit and has a 30% profit margin. Shipping and handling is typically $75 regardless of order size. Once the order is placed, it takes 3 months to receive it. Month 1 2 3 4 5 6 7 8 9 10 11 12 Demand 341 385 309 389 355 317 394 331 322 368 406 385 Month 13 14 15 16 17 18 19 20 21 22 23 24 Demand 280u 389 408 383 374 376 379 379 391 412 252 397 USE EXCEL The company typically uses opportunity cost as its largest component of cost to maintain the material (it is an annual interest of 25%). However, in the case of this product, at that cost is added a cost of $0.03 per unit per week for requiring specialized handling. Part (a) Determine the inventory control system that ensures there will be no shortage of material in stock 95% of the cycles. Part (b) Determine the inventory control system that ensures that 95% of customers they find the material they are looking for direct from inventory. Part (c) Determine the inventory control system that minimizes the average inventory system costs.
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