Paper and Less

Analysis 1

A

i. Order up to point giving 98% in-stock rate: 77

ii. Order up to point giving 98% fill rate: 69

iii. In stock rate takes the number of time periods while calculation whereas fill rate considers the total units as the demand is nonlinear in nature. When we change the order up to point there will be a drastic change in Fill rate in in-stock rate.

iv. Fill rate has the tendency to be more than in-stock rate because it is calculated in units and in-stock ratio is calculated in periods.

v. Profit is maximum at 57 order point and is 1516.36

B

i. $0.2-----(25%of 20/25 periods)

ii. 21-20=1

iii. Fractile------0.833 --- (1/1.2)

Optimal order point---59

iv. At order point 221 the difference net profit and cost of underage is 3 but as we approach towards order point 71 the difference becomes maximum which is 1455 as and when we reach the order point 24 the difference reduces to 31 and when order point reaches 0 it becomes (2012). It is a wave graph.

v. At order point 83 we got under age cost as zero.

Order up to points | Diff in net profits w.r.t op 59 |

59 | 0 |

60 | 16 |

61 | 32 |

62 | 48 |

63 | 64 |

64 | 78 |

65 | 92 |

66 | 106 |

67 | 118 |

68 | 130 |

69 | 142 |

70 | 154 |

71 | 166 |

72 | 176 |

73 | 184 |

74 | 190 |

75 | 196 |

76 | 200 |

77 | 202 |

78 | 204 |

79 | 206 |

80 | 208 |

81 | 210 |

82 | 212 |

83 | 214 |

C

Fill Rate method

D

The demand is nonlinear in nature hence once can have high stock inventory and loss of sales in any period. Keeping safety stock as a % of your total stock might address this problem but he has to pay a premium for holding this stock. So reactive sourcing can help to an extent.

Analysis 2

A

i. Mean—40.24

Standard Deviation—20.354571

ii.

iii. The cumulative frequencies given in exhibit are ideal case scenario which gives a perfect normal distribution (bell curve) whereas in the given data we got frequency...