warehouse management 4

You will lose marks if you do not show calculations. Seemarks breakdown on last page.

1) Amazon has an SKU costing $10 and is normally ordered in quantities of 800 units. The annual demand is 6,000 units, carrying cost is 20%, and the cost of placing an order is $100. Calculate the following for order quantities of 800 and 1,500 units.

For

Order Qty = 800

For

Order Qty = 1,500

A

Average inventory

B

# of orders placed per year

C

Annual inventory carrying cost

D

Annual ordering cost

E

Total Annual cost

2) Benny, the owner of Benny’s warehouse, decides to establish an EOQ for an item. The annual demand is 400,000 units, each costing $8, ordering costs are $32 per order, and inventory-carrying costs are 20%. Calculate the following.

Show your calculations and formulain white space below. Record your answers in the table.

A

The EOQ in units

B

# of orders placed per year

C

Annual inventory carrying cost

D

Annual ordering cost

E

Total Annual cost

3) Visit http://www.pitneybowes.com/us/location-intelligenc… . View the video, discover the features and capabilities then briefly summarizes what the software does and how it helps the company

4) CaseStudy“

Selecting a location using the factor-rating method.

Superior Pump is a leader in submersible sump pumps for home and commercial use. Superior’s sales are dominated (60 percent) by its 12 off-the-shelf products that are sold through company-owned and independent distributor channels to retailers throughout the United States, Canada, and Mexico. The remaining 40 percent of sales is a mixture of assemble- and make-to-order (customized) pumps. Currently, management is looking to expand direct coverage by building a distribution facility on the West coast. In consideration of sites, management is particularly concerned about labor, transportation, infrastructure, and facilities costs.

As the operations manager at Superior Pump, you have been asked to provide your expert opinion concerning the new location. The executive team members have done a lot of work narrowing down the locations and assessing the strengths and weaknesses of three possible sites: Seattle, San Diego, and Denver. They have also carefully detailed what critical decision issues need to be considered and have actually rated them on a scale of 1 to100.

The results of their efforts appear in the following worksheet. Your responsibility is to weigh the importance of each location decision issue based on management’s goals and then to make a recommendation based on your findings. Use the worksheet to determine your answer.

35

25

45

75

85

50

55

55

70

60

65

10

80

75

85

80

70

60

40

55

70

Based on your calculations, the optimal siteis: (show all work).

Now,

If all things stayed the same except – you changed the weight of Transportation availability from 15% to 5% and Facilitiescost from 15% to 25%. What are the new weighted scores.

Based on your new calculations, what is the optimal site: (show all work).

Marks breakdown

Question 1: 10 answers x 2 marks each= 20

Question 2: 5 answers x 2 markseach = 10

Question 3: Clearly explained= 20

Question 4: Part A 4 answers x 5 marks = 20

Part B 4 answers x 5 marks = 20

All Calculations and formula must be shown = 10

100 max.

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