Question 1 Inventory Management
Corner Stone Garage service vehicles for the Rock Stone and surrounding communities. Part TZ120 is a popular part used by the garage. Daily demand for the part is 120 with a standard deviation of 25. The garage operates 350 days per year. The cost of TZ120 is $150. The carrying cost for the part is 25% of the unit cost per annum. The ordering cost is $40. The lead time is 3 days. The garage wants to maintain a service level of 95% (2 standard deviations).
Current on-hand inventory is 500 units, with no open orders or backorders.
i. What is the EOQ?
ii. What is the number of order placed per year?
iii. What would be the average time between orders?
iv. What is the ROP?
v. An inventory withdrawal of 100 units was just made. - Is it time to reorder?
vi. If the store currently uses a lot size of 350 units, determine the annual holding cost and the annual ordering cost of this policy?
vii. What would be the annual cost saved, if any, by shifting from the 350-unit lot size to the EOQ?
Question 2 - Materials Requirements Planning
An MRP exercise is being implemented over an 8-week period and the following relevant information is provided:
One unit of A is made of four units of B, three units of C, and two units of D. B is composed of two units of E and two unit of D. C is made of four unit of B and two units of E. E is made of three unit of F.
Items B, C, E and F have one week lead times; A and D have lead times of two weeks. Assume that lot-for-lot (L4L) lot sizing is used for Items A, B, E and F; lots of size 50 and 100 are used for Items C and D respectively. Items C, E and F have on-hand (beginning) inventories of 20, 50 and 100, respectively; all other items have zero beginning inventory. We are scheduled to receive 20 units of A in Week 2, 40 units of E in Week 1, and also 100 units of F in Week 1. There are no other scheduled receipts.
a) Draw the product structure tree.
b) Draw the corresponding time-phased diagram showing lead times to scale.
c) If 60 units of A are required in Week 8, determine the necessary planned order releases for all components {6 schedules}
Question 3
The following matrix shows the costs in thousands of dollars for assigning Individuals A,B, C and D to Jobs 1, 2, 3 and 4.
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Individuals
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Jobs
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1
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2
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3
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4
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A
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10
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12
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4
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5
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B
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3
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11
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7
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6
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C
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3
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5
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6
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5
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D
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6
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9
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10
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12
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a) Determine the final assignments that will minimize total cost, using the "Hungarian LP method"
b) Write an LP formulation of the problem
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Item:
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Periods
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0
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1
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2
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3
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4
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5
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6
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7
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8
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Gross Requirements
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On Hand Inventory - Ending
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Net requirements
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Net receipts
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Planned order release
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Item:
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Periods
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0
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1
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2
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3
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4
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5
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6
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7
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8
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Gross Requirements
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On Hand Inventory - Ending
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Net requirements
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Net receipts
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Planned order release
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Item:
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Periods
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0
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1
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2
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3
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4
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5
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6
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7
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8
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Gross Requirements
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On Hand Inventory - Ending
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Net requirements
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Net receipts
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Planned order release
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