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Chapter 4: Q23-13DQ (page 646)
Discuss what is meant by forward loading and backward loading.
Forward loading is when scheduled resources are transmitted on time to keep the load within capacity boundaries. MRP employs backward inventory loading. It is used to reduce the amount of time that materials are held.
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The number of cases of merlot wine sold by the Connor Owen winery in eight years is as follows:
Using an exponential smoothing model with an alpha value of 0.20, estimate the smoothed value calculated as of the end of 2012. Use the average demand for 2005 through 2007 as your initial forecast, and then smooth the forecast forward to 2012.
Famous Albert prides himself on being the Cookie King of the West. Small, freshly baked cookies are the specialty of his shop. Famous Albert has asked for help to determine the number of cookies he should make each day. From an analysis of past demand, he estimates demand for cookies as
Demand | Probability of Demand |
1,800 dozen | 0.05 |
2,000 | 0.10 |
2,200 | 0.20 |
2,400 | 0.30 |
2,600 | 0.20 |
2,800 | 0.10 |
3,000 | 0.05 |
Each dozen sells for \(0.69 and costs \)0.49, which includes handling and transportation. Cookies that are not sold at the end of the day are reduced to $0.29 and sold the following day as day-old merchandise.
a. Construct a table showing the profits or losses for each possible quantity.
b. What is the optimal number of cookies to make?
c. Solve this problem by using marginal analysis.
Daily demand for a product is 60 units with a standard deviation of 10 units. The review period is 10 days, and the lead time is 2 days. At the time of review, there are 100 units in stock. If 98 percent service probability is desired, how many units should be ordered?
Ray鈥檚 Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated the annual demand for this model at 1,000 units. His cost to carry one unit is \(100 per year per unit, and he has estimated that each order costs \)25 to place. Using the EOQ model, how many should Ray order each time?
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?
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