Supply Chain Management
Supply Chain Management
A4.
Northcutt Bikes purchases wheels for their roadracing bikes. The table below has demand information for the past year.
a. Calculate the EOQ for ordering wheels, and the annual costs of inventory.
b. Calculate the ROP.
Demand for
Month Wheels
January 693
February 510
March 795
April 989
May 974
June 1074
July 340
August 706
September 955
October 546
November 620
December 433
Ave. Monthly Demand 719.6
Std. Dev., Monthly Demand 240.3
Other important information:
Yearly holding cost 20%
Ordering cost $200/order
Service level 95%
Leadtime 0.5 months
Item costs $40/wheel
A5. Given the product structure tree and the inventory shown below, computer the net requirements for A, B, C, D, E to produce 50 units of X. Set up MRP schedules and show your calculations.
X
A(1) B(1)
C(2) D(1) D(2) E(4)
Component A B C D E
Inventory 20 10 15 60 100