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Principles of Supply Chain Management LGMT 444

Problem Set 4

1. Apply ABC analysis for the following items:

 

Item Number Item Cost

($)

Annual Usage

(Unit)

A111 4.0 2,500
B111 1.5 7,500
C111 0.25 4,000
D111 2.0 1,300
E111 55 850
F111 5.5 2,000
G111 0.75 800
H111 1.7 6,000
I111 24 1,100
J111 4 3,500
K111 3.7 1,900
L111 16 1,200

 

 

 

 

2. Weekly demand for a product is 250 units with a standard deviation of 60 units (assume 52 weeks per year). Lead-time is 3 weeks. Calculate the safety stock and the reorder point for 98 percent service level.

 

 

 

3. Using the data below, find the EOQ, the total annual cost associated with the economic order quantity, the reorder point, number of orders per year and the time between orders.

 

Annual Demand 15,600 units
Weeks Operating 52 weeks/year
Set up Cost $60/order
Holding rate 20%
Unit cost $80 /unit
Lead-Time 5 weeks

 

 

 

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Wk 6
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