MGMT 3340 OPERATIONS MANAGEMENT FALL 2015 Assignment Five Part 1 The Toledo Mudhens, a minor league baseball team, breaks an average of eleven bats
MGMT 3340
OPERATIONS MANAGEMENT
FALL 2015
Assignment Five
Part 1
The Toledo Mudhens, a minor league baseball team, breaks an average of eleven bats per week during a 42 week season. The team purchases it bats from a national supplier. The order cost is $295 and the annual holding cost is 25 percent of the purchase price.
What is the annual demand for bats?
If bats cost $30.00 each, what is the economic order quantity for bats?
What is the total annual cost associated with the EOQ quantity?
What impact will an decrease to $195 in the order cost have on the EOQ quantity?
Suppose the Mudhens break an average of 9 bats per week during the season, what impact will this have on the EOQ quantity? (Assume the order cost is $295)
Assume the bat manufacturer offers the Mudhens the following price schedule
Order Quantity Price per Unit
– 49 $28.00
- 143 $27.00
144 or more $26.50
How many bats should the team order if the discount applies to all units?
What is the total annual cost associated with the best order quantity?
Part 2
Below is the Bill of Materials (BOM) and Master Production Schedule (MPS) for a chair. The number in the parenthesis indicates the quantity needed and the lead time is shown in weeks.
| Week | ||||||||
| Quantity Needed | 45 | 65 | 75 | 90 | 85 |
Determine the timing of the Planned Receipts and Planned Order Releases for the chairs assuming Scheduled receipts of 25 units in week 2 and 40 units in week 4 and a Projected On-hand Inventory of 20 units. Assume a L4L lot sizing rule with a lead time period of 2 weeks.
| Item: Chairs Lot Size: L4L Description: Lead Time: 2 week | ||||||||
| Week | ||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Gross Requirements | ||||||||
| Scheduled Receipts | ||||||||
| Projected Available Balance | ||||||||
| Net Requirements | ||||||||
| Planned Receipts | ||||||||
| Planned Order Releases | ||||||||
Determine the timing of the Planned Receipts and Planned Order Releases for the leg assemblies assuming Scheduled receipts of 35 units in week 1 and a Projected On-hand Inventory on 40 units. Assume an Economic Order Quantity lot sizing rule where the EOQ is 100.
| Item: Leg Assembly Lot Size: EOQ = 100 Description: Lead Time: 2 week | ||||||||
| Week | ||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Gross Requirements | ||||||||
| Scheduled Receipts | ||||||||
| Projected Available Balance | ||||||||
| Net Requirements | ||||||||
| Planned Receipts | ||||||||
| Planned Order Releases | ||||||||
Extra Credit
The daily demand for a product is 17 units with a standard deviation of 2.6 units. The review period is 30 days with a lead time of 14 days. Management has a set policy of satisfying 95% of demand from items in stock. At the beginning of the review period, there are 120 units in inventory. How many units should be ordered?
