Evaluate operational issues in supply chain management.

Evaluate operational issues in supply chain management.

Being able to calculate production levels and inventory costs is a key component of evaluating the fit of various options to business scenarios. For this assignment, answer the two problems below. Use template attached provided to fill in both your answers and your work.

Problem 1

Based on the demand shown below, use a (a) chase production strategy and (b) level production strategy to compute the monthly production, ending inventory or backlog, and workforce levels. A worker can produce 50 units per month. Beginning inventory in January is 500 units, and the firm is targeting 200 units of inventory at the end of June.

Month

JAN

FEB

MAR

APR

MAY

JUN

Demand

2000

3000

5000

6000

5000

2000

Production

Ending Inventory

Workforce

Problem 2

Given the following information, compute the economic order quantity, annual holding cost, annual order cost, and annual total inventory cost.

Annual requirements (R) = 50,000 units

Order cost (S) = $150 per order

Holding rate (k) = 15%

Unit cost (c) = $100 per unit

Chapter 7: “Inventory Management”

This chapter first explains the difference between dependent demand and independent demand items. Then it focuses on the independent demand items to describe the basic concepts and tools of inventory management, including the ABC inventory control system, inventory costs, and radio frequency identification. The chapter also discusses the three fundamental deterministic inventory models and the two major types of stochastic inventory models. Based on your reading in this unit, answer the following questions, with explanations (do not simply name concepts and move on):

1) Among the concepts you have learned, which do you think is most useful to you or your organization?

2) Which concept(s) caused the most confusion in this unit?

3) Which concept(s) did you wish went into further detail, either because you are interested or because it’s too complex for the coverage it received?

REFERENCE: Principles of Supply Chain Management

Joel D. Wisner; Keah-Choon Tan; G. Keong