Answer to Question #237116 in Management for gurpreet

Question

From past experience, Gadge-Go has provided you with the following data about product expectations for year 1:

➢ Daily average customer sales (normal distribution - 365 days) 167 ➢ Daily sales variation (as standard sales deviation): 29

➢ Time required from factory order to arrival (days): 36 ➢ Cost of placing a factory order (translator, contract exchange): $127

➢ Opportunity cost of capital (annual): 14%

➢ “One-Tool- Caker” value $23.50

➢ Required service level 75% (company standard)

Tasks: (Total 100 marks)

1. Recommend to Gadge-go an order quantity and reorder point for the One-tool- caker based on a continuous review system for year 1.

2. For results in Part 1, provide an explanation for the method used to calculate the z-score. Is the safety stock level adequate? Why or why not?

3. Gadge-go wishes to compare results in Task 1 with a periodic review system. What review period and target inventory period would you recommend? Has the safety stock level now changed, and if so, why?

Answer 1

Dear gurpreet, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order