Saved Help Save & Ex apter 9 Analytics Inventory Management You are a member of

Question

Saved Help Save & Ex apter 9 Analytics Inventory Management You are a member of E.T. Electronics' management team. The team is interested in adding a new product to the store's line of products, a Japanese robot called Hirata. This robot is very popular in Japan and is expected to make its mark in the U.S. market. It is capable of receiving 50 commands and performing 200 functions. E.T. Electronics' team expects to sell 1,000 units of Hirata during the upcoming year. The annual cost of carrying a Hirata robot in inventory is estimated to be $100, and the cost of placing a new order of the Hirata robot by sea from Japan is 100 oints eBook $250 E.T. Electronics' team is also considering ordering the robot by air from Japan, a faster but F int more expensive route that will cost $350

Explanation / Answer

Question - 1 ................ select Option - A

A = Annual demand = 1000

B = Ordering cost = 250 ( by sea) and 350 ( i.e by air )

C = Carring cost = 100

Optimum order size (sea) = Square root ( 2*A*B / C) = Square root ( 2 * 1000 * 250 / 100 ) = 71

Optimum order size (air) = Square root ( 2*A*B / C) = Square root ( 2 * 1000 * 350 / 100 ) = 84

Question - 2 ........... select - A

Number of orders = Demand / Optimal size

Question - 3 ............ Select - Option - C

Optimal time between orders = Optimal size / Demand * 365

Question - 4 ........... Select - A

Question - 5 ........... Select - B .... Order by air.

Refer to question - 2 ........ fewer orders ( i.e 12 against 14) is possible with air method.

A B C 1 Demand Optimal size Number of orders 2 1000 71 14 3 1000 84 12

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