EBK PRINCIPLES OF OPERATIONS MANAGEMENT
10th Edition
ISBN: 8220102744059
Author: HEIZER
Publisher: PEARSON
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Chapter 12, Problem 1.1CS
Summary Introduction
Introduction:
ZBC is a wholesale distributor of bicycles and bicycle parts situated at place S. The retail outlets of the company are within 400 mile radius to the distribution centers. The distribution center passes order to its retail outlets within 2 days after the order is placed by the retail outlets provided the stocks are available.
When there are no stocks, no backorder is taken and the outlets have to arrange the products from some other distributors and the company loses its order. The company distributes wide range of bicycles and air wing is the popular brand which is the major source of revenue.
The company receives all of its order from single manufacturer and shipment takes 4 weeks from the time of order. ZBC estimates the cost for ordering is $65. The purchase price is 60% of the retail price and carrying cost is 1% per month of the purchase price. The retail price of air wing is $170.
| Month | 2011 | 2012 |
|
| Jan | 6 | 7 | 8 |
| Feb | 12 | 14 | 15 |
| Mar | 24 | 27 | 31 |
| Apr | 46 | 53 | 59 |
| May | 75 | 86 | 97 |
| Jun | 47 | 54 | 60 |
| Jul | 30 | 34 | 39 |
| Aug | 18 | 21 | 24 |
| Sep | 13 | 15 | 16 |
| Oct | 12 | 13 | 15 |
| Nov | 22 | 25 | 28 |
| Dec | 38 | 42 | 47 |
| Total | 343 | 391 | 439 |
The demand for the past two year is shown in the table and the company wants to make inventory plan for 2016. The company wants to maintain 95% service level to minimize the loss.
To develop: Inventory plan for company ZBC.
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Chapter 12 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
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