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    MBA 659. Final Assignment PDF

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    Mainul Hossain
    Axletic Inc. imports critical bicycle components from a Chinese supplier. The purchasing head wants to jointly order top tubes, rims, and rear shocks to reduce costs. Monthly demand and unit prices are given for each component. Additional fixed costs are incurred for joint orders. The assignment asks to calculate optimal lot sizes, inventory levels, order frequency, costs, and more to help Axletic decide on joint ordering. Novanym retail shop sells portable computers. The manufacturer offers quantity discounts on monthly orders of 1,200 units. The assignment asks to calculate the optimal order quantity and annual cost to help Novanym take advantage of discounts while minimizing total costs. Formulas for economic order quantity, number of orders

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    MBA 659. Final Assignment PDF

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    Mainul Hossain
    104 views2 pages
    Axletic Inc. imports critical bicycle components from a Chinese supplier. The purchasing head wants to jointly order top tubes, rims, and rear shocks to reduce costs. Monthly demand and unit prices are given for each component. Additional fixed costs are incurred for joint orders. The assignment asks to calculate optimal lot sizes, inventory levels, order frequency, costs, and more to help Axletic decide on joint ordering. Novanym retail shop sells portable computers. The manufacturer offers quantity discounts on monthly orders of 1,200 units. The assignment asks to calculate the optimal order quantity and annual cost to help Novanym take advantage of discounts while minimizing total costs. Formulas for economic order quantity, number of orders

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    MBA 659. Final Assignment.pdf

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    Axletic Inc. imports critical bicycle components from a Chinese supplier. The purchasing head wants to jointly order top tubes, rims, and rear shocks to reduce costs. Monthly demand and unit prices are given for each component. Additional fixed costs are incurred for joint orders. The assignment asks to calculate optimal lot sizes, inventory levels, order frequency, costs, and more to help Axletic decide on joint ordering. Novanym retail shop sells portable computers. The manufacturer offers quantity discounts on monthly orders of 1,200 units. The assignment asks to calculate the optimal order quantity and annual cost to help Novanym take advantage of discounts while minimizing total costs. Formulas for economic order quantity, number of orders

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    104 views2 pages

    MBA 659. Final Assignment PDF

    Uploaded by

    Mainul Hossain
    Axletic Inc. imports critical bicycle components from a Chinese supplier. The purchasing head wants to jointly order top tubes, rims, and rear shocks to reduce costs. Monthly demand and unit prices are given for each component. Additional fixed costs are incurred for joint orders. The assignment asks to calculate optimal lot sizes, inventory levels, order frequency, costs, and more to help Axletic decide on joint ordering. Novanym retail shop sells portable computers. The manufacturer offers quantity discounts on monthly orders of 1,200 units. The assignment asks to calculate the optimal order quantity and annual cost to help Novanym take advantage of discounts while minimizing total costs. Formulas for economic order quantity, number of orders

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    EAST DELTA UNIVERSITY (EDU)

    Final Assignment. Spring 2020


    School of Business
    SCM 303: Supply Chain Management
    Total Points: 30

    (Solve Both the Problems Below)

    Question # 1: Products Ordered and Delivered Jointly. (15 points)


    Axletic Inc., an American company, is well known for making high-end customized bicycles for the local
    market, the USA. Some of their important manufacturing parts however are imported from certain
    suppliers in China. Critical components such as top tube, rim, and rear shock are imported from a supplier
    to manufacturing plant of Axelctic. Earlier Axlectic used to place independent orders for each item but the
    new recruited purchasing head has decided to order all the three components jointly from the supplier.
    The monthly demand for top tube is 900 units and priced at $50/unit; monthly demand for rim is 1,200
    units and priced at $45/unit, and monthly demand for rear shock is 750 units and priced at $70/unit. Each
    shipment would cost Axlectic $2500/order that includes only transportation cost. For each material
    ordered and delivered on the same vehicle, an additional fixed cost of $500/order is incurred for import
    duty, receiving, administrative, and inspection. Axlectic incurs a holding cost of 30% per year. Assuming
    yourself as purchasing head of the company, your job would be to help Axelctic Inc. to gather following
    relevant information to facilitate their decision making on joint ordering.
    Please find out:
    a) The optimal lot size for each product
    b) Cycle inventory
    c) Order Interval (in days)
    d) Order frequency (no. of orders)
    e) Annual Holding Cost
    f) Annual Ordering Cost
    g) Order interval (in days)
    h) Average flow time (in days)
    i) Total Annual Ordering & Holding Cost
    *Formulas* (you may or may not require to use all the formulas)

    Average flow time =

    x n*
    1
    Page

    No. of Order = D/Q*, Order Interval =Q*/D


    Optimum Lot Size Q* = D / n*

    Page 1 of 2
    EAST DELTA UNIVERSITY (EDU)
    Final Assignment. Spring 2020
    School of Business
    SCM 303: Supply Chain Management

    Question # 2: All Unit Quantity Discounts (15 Points)

    Novanym is an electronic retail shop based in Barcelona, famous mostly for the electronic gazettes it
    offers to its customers. Recently, because of some special features, ‘i-gig’, a portable computer device is
    gaining popularity among the tech-savvy consumers. i-gig manufacturer is located in Japan and Novanym
    is planning to buy the device from it. Novanym estimates that it would require around 1,200 i-gigs per
    month. The shipping company would charge $1,500 per shipment, independent of the quantity purchased.
    i-gig manufacturer offers an all unit quantity discount with a price of $120/unit with orders under 1,200
    units, $115/unit for orders between 1,200 and 2,499 units, $112/unit for orders between 2,500 and 3,499
    units, and $110/unit for orders larger than 3,500 units. Novanym incurs a holding cost of 50 percent.

    You being a supply chain professional would help Novanym to answer the following questions:
    • What is the optimal number of i-gigs the company should order per lot?
    • What is the annual cost of such a policy?

    *Three possible cases for Qi


    1. qi <= Qi < qi +1
    2. Qi < qi
    3. Qi >= qi +1

    Formulas:

    2
    Page

    Page 2 of 2

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