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Chapter 4: Q. 20-1DQ (page 543)
Distinguish between dependent and independent demand in a McDonald鈥檚 restaurant, in an integrated manufacturer of personal copiers, and a pharmaceutical supply house.
The dependent demand category is an add-on to the independent demand category.
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Following are the process flow sequences for three products: A, B, and C. There are two bottleneck operations鈥攐n the first leg, and the fourth leg鈥攎arked with an X. Boxes represent processes, which may be either machine or manual. Suggest the location of the drum, buffer, and ropes.
Retailers Warehouse (RW) is an independent supplier of household items to department stores. RW attempts to stock enough items for a 98 percent service probability. A stainless steel knife set is one item it stocks. Demand (2,400 sets per year) is relatively stable over the entire year. Whenever a new stock is ordered, a buyer must assure that numbers are correct for stock on hand and then phone in a new order. The total cost involved to place an order is about \(5. RW figures that holding inventory in stock and paying for interest on borrowed capital, insurance, and so on, add up to about \)4 holding cost per unit per year. Analysis of the past data shows that the standard deviation of demand from retailers is about four units per day for a 365-day year. Lead time to get the order in seven days.
a. What is the economic order quantity?
b. What is the reorder point?
Jill鈥檚 Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows:
Item | Tegdiws | Widgets |
Annual demand | 10,000 | 5,000 |
Holding cost (% of item cost) | 20% | 20% |
Setup or order cost | \( 150.00 | \) 25.00 |
Lead time | 4 weeks | 1 week |
Safety stock | 55 units | 5 units |
Item cost | \( 10.00 | \) 2.00 |
Annual demand Holding cost (% of item cost) Setup or order cost
a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point?
b. What is the inventory control system for Widgets?
Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec.
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Last year | ||||||||||||
This year |
What is the term for a computer program often used to facilitate database queries that are not part of a standard ERP system?
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