| E1829C: Inventory Management |
Assignment Details:
Choose ONE of the scenarios for your individual assignment. You are to complete ALL tasks under the chosen scenario (state any assumptions clearly):
Scenario 1
Company 1 is a consumer electronics firm; they have a television manufacturing plant. To have a better understanding of the manufacturing process, you can click on the link to view how televisions are typically produced.
Task 1:
Identify and describe the types of inventory the company owns, manages or uses, and their role in the supply chain, giving examples of each type. The types of inventory can include independent demand items, dependent demand items. raw materials, work-in-process, finished goods, MRO, transit inventory and buffer inventory, etc.
Task 2:
Give examples of two items that are more suited for periodic review and two items that are more suited for continuous review, justify.
Task 3:
Identify and describe any five possible inventory costs incurred.
Task 4:
Propose any two inventory reduction methods that can help the company to reduce inventory costs, elaborating on how it can result in cost reduction. You can propose different reduction methods for different types of inventory. considerCPFR, VMI, Kanban, JIT, barcoding, and other technologies.
Task 5:
Company 1 also supplies television mount, which is bought from an overseas supplier. The demand for television mountis fairly constant throughout the year at 2,400 pieces per year. The cost of placing an order is estimated to be $100 regardless of ordering quantity. The holding cost is 5% of the item price per year. The discount prices are the following:
- Unit Cost Price is $25 if the order quantity is equal or less than 100 units
- Unit Cost Price is $24 if the order quantity is equal or between 101 and 500 units
- Unit Cost Price is $23 if the order quantity is equal or more than 501 units
Help Company 1 decide they should take advantage of the quantity discounts available. Determine the number of television mounts to order each time and the total annual inventory cost. Show all your workings clearly.
Scenario 2
Company 2 manufactures different types of bicycles. To have a better understanding of the manufacturing process, you can click on the link to view how bicycles are typically produced.
Task 1:
Identify and describe the types of inventory the company owns, manages or uses, and their role in the supply chain, giving examples of each type. The types of inventory can include independent demand items, dependent demand items. raw materials, work-in-process, finished goods, MRO, transit inventory and buffer inventory, etc.
Task 2:
Give examples of two items that are more suited for periodic review and two items that are more suited for continuous review, justify.
Task 3:
Identify and describe the five possible inventory costs incurred.
Task 4:
Propose any two inventory reduction methods that can help the company to reduce inventory costs, elaborating on how it can result in cost reduction. You can consider CPFR, VMI, Kanban, JIT, barcoding, and other technologies.
Task 5:
Figure 1 shows the product structure for a beginner’s skateboard that is also manufactured in Company 2. The lead-time and the quantity per parent information are also provided.
What is the quantity of Truck Assembly and Wheels that the company needs to purchase, given that the demand for Beginner’s Skateboardis 300 units? Assume the current inventory and scheduled receipt for the three components are zero.
Complete the MRP tables for Skateboard, Accessories, and Nuts & Bolts shown under Table 1
