I need assistance with the following case study. Short answer form is fine.
Read the case study Parts Emporium 10-1 and thoroughly answer the questions at the end of the case. Provide examples and show all mathematical calculations, where appropriate and in detail.
Module Topic: Managing Logistics and Resource Planning
Textbook: Foundations of Operations Management, Larry P. Ritzman and Lee J. Krajewski, Prentice Hall, ISBN#0-13-008521-9 including CDROM, 2003.
Chapter topics: Supply Chain Management; Inventory Management
1. Put yourself in Sue McCaskey's position and prepare a detailed report to Dan Block and Ed Spriggs on managing the inventory of the EG151 exhaust gasket and the DB032 drive belt. Be sure to present a proper inventory system and recognize all relevant costs.
Let us prepare an inventory system for EG151 exhaust gasket: First we sum up the gasket sales/demand for the 21 weeks that is given to us. This gives us a total of 2142 gaskets for 21 week period if we divide it by 21 we get average weekly sales of 102 gaskets. As the lead time for gaskets is two weeks we multiply this quantity by 2 and we get a figure of 204. We take a safety stock level of one week as this is the half of the lead time and we add this to the figure of 204 and we get a reorder quantity of 306. This should be the reorder quantity for EG151. This also means that the average stock will be 204/2 that is 102 plus safety stock 102 that is 204 units.
Now in case of EG151 the gross profit is 32 percent and so the ...
This solution talks about case study Parts Emporium 10-1. It then gives suggestions for answers at the end of the case.