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MBA 659.final Assignment PDF

This document contains two questions from a final assignment for a supply chain management course. Question 1 asks students to analyze the costs of ordering two components independently versus jointly for a motorcycle manufacturer. Students are asked to calculate metrics like optimal lot size, annual holding and ordering costs, and total annual costs under both scenarios. Question 2 asks students to determine the optimal order quantity for a bookstore given a volume discount schedule from its vendor for selling university jackets. Students are provided formulas to help calculate order quantities under different discount thresholds.

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Anis Rahman
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322 views2 pages

MBA 659.final Assignment PDF

This document contains two questions from a final assignment for a supply chain management course. Question 1 asks students to analyze the costs of ordering two components independently versus jointly for a motorcycle manufacturer. Students are asked to calculate metrics like optimal lot size, annual holding and ordering costs, and total annual costs under both scenarios. Question 2 asks students to determine the optimal order quantity for a bookstore given a volume discount schedule from its vendor for selling university jackets. Students are provided formulas to help calculate order quantities under different discount thresholds.

Uploaded by

Anis Rahman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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EAST DELTA UNIVERSITY (EDU)

Final Assignment. Spring 2020


School of Business
SCM 303: Supply Chain Management

Full Marks: 30

Question # 1: Ordering Products Independently & Jointly (15 Points)


Yamaha a Japanese motorcycle manufacturer requires two components to import from a supplier in China. At
present the company requires 300 units of component A each day and the need for component B is 500 units per
day. Component A costs $55 per unit and component B costs $35 per unit. The transportation cost including
customs duty is about $6,500 per shipment from China to the Japanese assembly plant of Yamaha. For each
component ordered and delivered on the same truck, an additional fixed cost of $800 is incurred for receiving and
inspection. Yamaha incurs a holding cost of 35 percent per component per year. At present the company orders
the components independently. Recently the purchasing head of the company have been considering to order
both the components jointly. The company wants to find the complete information on both the options
(independent as well as joint ordering) so as to adopt the option that results in the lowest annual cost of ordering
and holding together. Please find the following information on behalf of the company to help them in their
decision making:

a) The optimal lot size for each of the components


b) Cycle inventory
c) Order frequency (no. of orders)
d) Annual Holding Cost
e) Annual Ordering Cost
f) Average flow time (in days)
g) Total Annual Ordering & Holding Cost together
Which option (between independent & joint ordering) results in lower cost? What is the difference between the
annual total cost of ordering and holding between the two options?

*Formulas* (you may or may not require all the formulas)

Average flow time =

x n*

Optimum Lot Size Q* = D / n*


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EAST DELTA UNIVERSITY (EDU)
Final Assignment. Spring 2020
School of Business
SCM 303: Supply Chain Management

Question # 2: All Unit Quantity Discounts (15 Points)

The SBX Bookstore at The Ohio State University purchases from a vendor jackets emblazoned with the
Ohio logo. The vendor sells the jackets to the store for $43 dollars per jacket. The cost to the bookstore
for placing an order is $200, and the annual holding cost is 30 percent of the cost of a jacket. The book
store manager estimates that 2,500 jackets will be sold during the year. The vendor has offered the
bookstore the following all unit volume discount schedule:

Order Size Unit Price


0 - 299 $43
300 - 499 $42.14
500 - 799 $41.28
800+ $40.85

You as a store manager needs to determine the bookstore’s optimal order quantity, given this quantity
discount information.

*Three possible cases for Qi


1. qi <= Qi < qi +1
2. Qi < qi
3. Qi >= qi +1

Formulas:
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