QUESTION 2 Toysrfun is a company that purchases toys from abroad for sale in Namibia. The company is concerned about inventory management operations. It is considering adopting an inventory management system based upon the EOQ model. The company's estimates of its inventory management costs are shown below: Storage costs Insurance Handling % Obsolescence Opportunity costs of funds invested in inventory Fixed costs associated with placing each order for inventory are N$311.54. 3 1 1 3 10 The purchase price of the toys to Toyzrfun N$4.50. There is a two-week delay between the time that new inventory is ordered from suppliers and the time that it arrives. Sales 12 000 16 000 20 000 24 000 The toys are sold by the company at N$6.30 each. The variable costs to Toyzrfun Ltd of selling is N$0.30 per unit. Demand for the toys from Toyzrfun's customers averages 10 000 units per week, but recently it has varies from 6 000 to 14 000 units per week. Based on the recent evidence, probability of unit sales in any two week period has been estimated as follows: 0.20 0.05 Probability 0.05 0.20 0.50 28 000 If adequate inventory is not available when demanded by Toyzrfun's customers in any two-week period,
QUESTION 2 Toysrfun is a company that purchases toys from abroad for sale in Namibia. The company is concerned about inventory management operations. It is considering adopting an inventory management system based upon the EOQ model. The company's estimates of its inventory management costs are shown below: Storage costs Insurance Handling % Obsolescence Opportunity costs of funds invested in inventory Fixed costs associated with placing each order for inventory are N$311.54. 3 1 1 3 10 The purchase price of the toys to Toyzrfun N$4.50. There is a two-week delay between the time that new inventory is ordered from suppliers and the time that it arrives. Sales 12 000 16 000 20 000 24 000 The toys are sold by the company at N$6.30 each. The variable costs to Toyzrfun Ltd of selling is N$0.30 per unit. Demand for the toys from Toyzrfun's customers averages 10 000 units per week, but recently it has varies from 6 000 to 14 000 units per week. Based on the recent evidence, probability of unit sales in any two week period has been estimated as follows: 0.20 0.05 Probability 0.05 0.20 0.50 28 000 If adequate inventory is not available when demanded by Toyzrfun's customers in any two-week period,
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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