1CASE STUDY QUESTIONSNAME:INSTITUTIONCOURSE NUMBERCOURSE TITLE:INSTRUCTOR’S NAME:DUE DATE:2CASE STUDY QUESTIONSQuestion 1The annual demand in 2012 isThe 2012 annual demand 5 SKU’S ROP and EOQThere was anEOQ increase due to an increase in demand3Therefore the EOQ will be square rooted if there is a double in the annual demand.Question 2Part-time costs and set-up costs shall be included since they will still be idle.Costs of three part-time employees in one hour includes 0.5 *3 *23.5 = 35.25The nest set-up cost = 35.25 +63.7 = $98.95The storage was taken as zero percent in the carrying costs. If the was 2% in the storage costs thenew carrying costs would be: 3 + 6 +2 = 11%The major EOQ assumptions include;1. There are often stock out since the demands are never at a standards rate.2. Relatively longer time is taken for a new order batch; hence there will be an adjustmentof the ROP to add the lead time when placing an order.4Brodie was first tasked with updating the ROP and EOQ of the one hundred and forty-one SKUduring the internship process since there were no calculations performed in 2011 to reflect on thelatest demand levels. The formula used when calculating the ROP three weeks divided by fiftytwo weeks annually multiplied by the demand per year. Due to the several logical mistakes in thedata given, EOQ adjustments will be difficult, especially because there is an expression inpercentage of the inventory carrying costs, set … Purchase document to see full attachment
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