Answer:1. What is the economic order quantity? Q=_7 (round to nearest whole number)2. If average demand during lead time is normally distributed with a standard deviation of 2.5 bicycles, what is the reorder pointwith the desired service level?Safety stock =8 bicycles9 bicycles (round both to nearest whole number)3. What is the total annual inventory cost including safety stock? $___10 (round to nearest dollar)4. If SBC is currently ordering 100 bicycles at a time, how much is the company overpaying in total inventory cost?$___11 (round to nearest dollar)5. Each year during their anniversary celebration, SBC offers a collectable water bottle at the special price of $5. They typically sell100 bottles with a standard deviation of 12 bottles. The cost of each bottle is $1.50, and any unsold inventory is donated to a localcharity. What is the service level and optimal order quantity for the water bottles?Service level =% 12Optimal order quantity=_6. What is the Dragonfly's ADV (round to nearest 1 decimal)? If SBC's total inventory based on ADV is $275,000, what percent of thetotal inventory based on ADV does the Dragonfly represent? (nearest whole percent) 14ROP =_137. If SBC's COGS on its income statement is $412,500 and its balance sheet lists inventory at $83,600, what is its IT? If the industryaverage is 8 weeks of supply, how does SBC compare (better or worse)? 15 PART ASpeedy Bicycle Company (SBC) is a wholesale distributor of a wide variety of bicycles and bicycle parts. The most popular model isthe Dragonfly, which sells for $170. All manufacturing is done at a plant in China, and shipment takes a month (30 days) from thetime an order is placed. The estimated order cost is $75, including customs clearance. SBC's cost per bicycle is 65% of retail price,and inventory carrying cost is 11% per year of SBC's cost. If the company cannot fulfill a retail order, the retailer will get theshipment from another distributor and SBC loses that business. SBC is planning inventory for 2023 based on forecasted demand andwants to maintain a 93% service level to minimize lost orders. The company has 300 working days per year.2021 Forecasted Demand for the Dragonfly Bicycle Model:FAJ1558J8M31M96J5938A23S16014N26D41

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Answer: 1. What is the economic order quantity? Q=. 7 (round to nearest whole number) 2. If average demand during lead time is normally distributed with a standard deviation of 2.5 bicycles, what is the reorder point with the desired service level? Safety stock = 8 bicycles 9 bicycles (round both to nearest whole number) 10 (round to nearest dollar) 3. What is the total annual inventory cost including safety stock? $_ 4. If SBC is currently ordering 100 bicycles at a time, how much is the company overpaying in total inventory cost? $_ _11 (round to nearest dollar) 5. Each year during their anniversary celebration, SBC offers a collectable water bottle at the special price of $5. They typically sell 100 bottles with a standard deviation of 12 bottles. The cost of each bottle is $1.50, and any unsold inventory is donated to a local charity. What is the service level and optimal order quantity for the water bottles? Service level = % 12 Optimal order quantity= ROP = 13

Answer: 1. What is the economic order quantity? Q=. 7 (round to nearest whole number) 2. If average demand during lead time is normally distributed with a standard deviation of 2.5 bicycles, what is the reorder point with the desired service level? Safety stock = 8 bicycles 9 bicycles (round both to nearest whole number) 10 (round to nearest dollar) 3. What is the total annual inventory cost including safety stock? $_ 4. If SBC is currently ordering 100 bicycles at a time, how much is the company overpaying in total inventory cost? $_ _11 (round to nearest dollar) 5. Each year during their anniversary celebration, SBC offers a collectable water bottle at the special price of $5. They typically sell 100 bottles with a standard deviation of 12 bottles. The cost of each bottle is $1.50, and any unsold inventory is donated to a local charity. What is the service level and optimal order quantity for the water bottles? Service level = % 12 Optimal order quantity= ROP = 13

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
PART A Speedy Bicycle Company (SBC) is a wholesale distributor of a wide variety of bicycles and bicycle parts. The most popular model is the Dragonfly, which sells for $170. All manufacturing is done at a plant in China, and shipment takes a month (30 days) from the time an order is placed. The estimated order cost is $75, including customs clearance. SBC's cost per bicycle is 65% of retail price, and inventory carrying cost is 11% per year of SBC's cost. If the company cannot fulfill a retail order, the retailer will get the shipment from another distributor and SBC loses that business. SBC is planning inventory for 2023 based on forecasted demand and wants to maintain a 93% service level to minimize lost orders. The company has 300 working days per year. 2021 Forecasted Demand for the Dragonfly Bicycle Model: F A M J 15 58 96 J 8 M 31 J per order 1 Inventory Activity 59 38 (round to nearest cent) 2 bicycles 6 A 23 Develop an inventory plan for the Dragonfly model. Canvas responses…
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