Supply Chain Management Homework 2 ■ Homework submission deadline:20:00,2014-Nov-14 The homework must be completed and submitted on an individual basis.If two or more students submit identical homework solutions,each student will get only a fraction of the grade for this assignment. ◆ Late policy:first late day will reduce your assignment grade by 40%.Additional days will reduce the entire homework grade to 0.If you have a special circumstance,please contact jianjun.gao@vip.163.com ahead of the submission deadline. Submission Policy:Please email your answer to jianjun.gao@vip.163.com.The title of your email should be in the following format "SCM-id-name",e.g.,"SCM-10000000-Zhangxiaoguang". Question 1(25) Consider monthly demand for the ABC Corporation as shown in the following Table.Forecast the monthly demand for Year 6 using the static method for forecasting.Evaluate the bias,TS,MAD, MAPE,and MSE.Evaluate the quality of the forecast.Please also submit the excel file) Sales Year 1 Year 2 Year 3 Year 4 Year 5 January 2,000 3,000 2.000 5.000 5.000 February 3,000 4,000 5.000 4,000 2,000 March 3.000 3.000 5.000 4,000 3,000 April 3.000 5.000 3.000 2.000 2000 May 4000 5.000 4.000 5.000 7.000 June 6.000 8,000 6.000 7.000 6.000 July 7,000 3,000 7.000 10,000 8.000 August 6,000 8,000 10.000 14.000 10.000 September 10,000 12,000 15.000 16.000 20.000 October 12,000 12.000 15.000 16.000 20.000 November 14,000 16.000 18.000 20.000 22.000 December 8,000 10.000 8.000 12.000 8.000 Total 78,000 89,000 98.000 115,000 113.000 Question 2(25) Prefab,a furniture manufacturer,uses 20,000 square feet of plywood per month.Its trucking company charges Prefab $400 per shipment,independent of the quantity purchased.The manufacturer offers an all unit quantity discount with a price of $1 per square foot for orders under 20,000 square feet,$0.98 per square foot for orders between 20,000 square feet and 40,000 square feet,and $0.96 per square foot for orders larger than 40,000 square feet.Prefab incurs a holding cost of 20 percent.What is the optimal lot size for Prefab?What is the annual cost of such a policy?What is the cycle inventory of plywood at Prefab? How does it compare with the cycle inventory if the manufacturer does not offer a quantity discount but sells all plywood at $0.96 per square foot? Question 3(25) Motorola obtains cell phones from its contract manufacturer located in China to serve the U.S. market.The U.S.market is served from a warehouse located in Memphis,Tennessee.Daily demand at the Memphis warehouse is normally distributed,with a mean of 5,000 and a standard
Supply Chain Management Homework 2 Homework submission deadline: 20:00, 2014-Nov-14 The homework must be completed and submitted on an individual basis. If two or more students submit identical homework solutions, each student will get only a fraction of the grade for this assignment. Late policy: first late day will reduce your assignment grade by 40%. Additional days will reduce the entire homework grade to 0. If you have a special circumstance, please contact jianjun.gao@vip.163.com ahead of the submission deadline. Submission Policy: Please email your answer to jianjun.gao@vip.163.com. The title of your email should be in the following format “SCM-id-name”, e.g., “SCM-10000000-Zhangxiaoguang”. Question 1 (25) Consider monthly demand for the ABC Corporation as shown in the following Table. Forecast the monthly demand for Year 6 using the static method for forecasting. Evaluate the bias, TS, MAD, MAPE, and MSE. Evaluate the quality of the forecast. ( Please also submit the excel file) Question 2(25) Prefab, a furniture manufacturer, uses 20,000 square feet of plywood per month. Its trucking company charges Prefab $400 per shipment, independent of the quantity purchased. The manufacturer offers an all unit quantity discount with a price of $1 per square foot for orders under 20,000 square feet, $0.98 per square foot for orders between 20,000 square feet and 40,000 square feet, and $0.96 per square foot for orders larger than 40,000 square feet. Prefab incurs a holding cost of 20 percent. What is the optimal lot size for Prefab? What is the annual cost of such a policy? What is the cycle inventory of plywood at Prefab? How does it compare with the cycle inventory if the manufacturer does not offer a quantity discount but sells all plywood at $0.96 per square foot? Question 3(25) Motorola obtains cell phones from its contract manufacturer located in China to serve the U.S. market. The U.S. market is served from a warehouse located in Memphis, Tennessee. Daily demand at the Memphis warehouse is normally distributed, with a mean of 5,000 and a standard
deviation of 4,000.The warehouse aims for a CSL of 99 percent.The company is debating whether to use sea or air transportation from China.Sea transportation results in a lead time of 36 days and costs $0.50 per phone.Air transportation results in a lead time of 4 days and costs $1.50 per phone.Each phone costs $100,and Motorola uses a holding cost of 20 percent.Given the minimum lot sizes,Motorola would order 100,000 phones at a time (on average,once every 20 days)if using sea transport and 5,000 phones at a time(on average,daily)if using airtransport.To begin with,assume that Motorola takes ownership of the inventory on delivery. a)Assuming that Motorola follows a continuous review policy,what reorder point and safety inventory should the warehouse aim for when using sea or air transportation?How many days of safety and cycle inventory will Motorola carry under each policy? b)How many days of cycle inventory does Motorola carry under each policy? c)Under a continuous review policy,do you recommend sea or air transportation if Motorola does not own the inventory while it is in transit?Does your answer change if Motorola has ownership of the inventory while it is in transit? Question 4(25) Epson produces printers in its Taiwan factory for sale in Europe.Printers sold in different countries differ in terms of the power outlet as well as the language of the manuals.Currently,Epson assembles and packs printers for sale in individual countries.The distribution of weekly demand in different countries is normally distributed,with means and standard deviations as shown in the following Table Country Mean Demand Standard Devlation France 3.000 2,000 Germany 4.000 2.200 Spain 2.000 1.400 Italy 2,500 1,600 Portugal 1.000 800 UK 4,000 2.400 Assume demand in different countries to be independent.Given that the lead time from the Taiwan factory is eight weeks,how much safety inventory does Epson require in Europe if it targets a CSL of 95 percent?Epson decides to build a central DC in Europe.It will ship base printers(without power supply)to the DC.When an order is received,the DC will assemble power supplies,add manuals,and ship the printers to the appropriate country.The base printers are still to be manufactured in Taiwan with a lead time of eight weeks.How much saving of safety inventory can Epson expect as a result? Bonus Question(30) In the example 10-6 in Textbook(3rd edition and 4th edition),the author offers a tailored aggregation method and achieved the total cost as $130,767.(This is the example 11-6 in 5th edition of the textbook).Can you find even better aggregated inventory policy which reduces the total cost
deviation of 4,000. The warehouse aims for a CSL of 99 percent. The company is debating whether to use sea or air transportation from China. Sea transportation results in a lead time of 36 days and costs $0.50 per phone. Air transportation results in a lead time of 4 days and costs $1.50 per phone. Each phone costs $100, and Motorola uses a holding cost of 20 percent. Given the minimum lot sizes, Motorola would order 100,000 phones at a time (on average, once every 20 days) if using sea transport and 5,000 phones at a time (on average, daily) if using airtransport. To begin with, assume that Motorola takes ownership of the inventory on delivery. a) Assuming that Motorola follows a continuous review policy, what reorder point and safety inventory should the warehouse aim for when using sea or air transportation? How many days of safety and cycle inventory will Motorola carry under each policy? b) How many days of cycle inventory does Motorola carry under each policy? c) Under a continuous review policy, do you recommend sea or air transportation if Motorola does not own the inventory while it is in transit? Does your answer change if Motorola has ownership of the inventory while it is in transit? Question 4(25) Epson produces printers in its Taiwan factory for sale in Europe. Printers sold in different countries differ in terms of the power outlet as well as the language of the manuals. Currently, Epson assembles and packs printers for sale in individual countries. The distribution of weekly demand in different countries is normally distributed, with means and standard deviations as shown in the following Table Assume demand in different countries to be independent. Given that the lead time from the Taiwan factory is eight weeks, how much safety inventory does Epson require in Europe if it targets a CSL of 95 percent? Epson decides to build a central DC in Europe. It will ship base printers (without power supply) to the DC. When an order is received, the DC will assemble power supplies, add manuals, and ship the printers to the appropriate country. The base printers are still to be manufactured in Taiwan with a lead time of eight weeks. How much saving of safety inventory can Epson expect as a result? Bonus Question (30) In the example 10-6 in Textbook (3 rd edition and 4th edition), the author offers a tailored aggregation method and achieved the total cost as $130,767. (This is the example 11-6 in 5th edition of the textbook). Can you find even better aggregated inventory policy which reduces the total cost
