Logistic Question Paper 2010

SECTION A – ANSWER ALL QUESTIONS Northcutt Bikes: The Service Department

Question 1.) FB378 Annual demand: Annual holding cost, per unit: Cost per order: Cost per unit: Economic order quantity: Average order lead time: Standard deviation of lead time: Average demand during time unit: Standard deviation of demand during time unit: Percent desired service level: z value (for desired service level): Reorder point: Question 2.) Current order quantity: 120 Current annual holding cost: $60.00 Current annual ordering cost: 558.8333 Total holding and ordering cost: $618.83 Economic order quantity: 367 EOQ annual holding cost: 183.5 EOQ annual ordering cost: 182.7248 EOQ total holding and ordering cost: $366.22 Total savings using EOQ: $252.61 Current order quantity: 850 Current annual holding cost: $913.75 Current annual ordering cost: 43.76471 Total holding and ordering cost: $957.51 Economic order quantity: 187 EOQ annual holding cost: 201.025 EOQ annual ordering cost: 198.9305 EOQ total holding and ordering cost: $399.96 Total savings using EOQ: $557.56 1916 $1.00 $35.00 $5.00 367 3 0 36.85 7.91 95% 1.65 134 GS131 Annual demand: Annual holding cost, per unit: Cost per order: Cost per unit: Economic order quantity: Average order lead time: Standard deviation of lead time: Average demand during time unit: Standard deviation of demand during time unit: Percent desired service level: z value (for desired service level): Reorder point: 2480 $2.15 $15.00 $10.75 187 6 0 47.69 12.78 95% 1.65 338

Question 3.) There is no single right answer to this question. They should be included as a cost of poor service quality, as a lost revenue, and as service quality improves so the demand will increase. The increase in demand will effect the EOQ from question 1, but this number can be easily calculated using the new average demand.

SECTION B – Answer all questions Question 1 Planning activities – which seek to balance demand requirements against resources, and communicate these...