Supply Chain Management

Supply Chain Management

Northcutt Bikes purchases wheels for their roadracing bikes. The table below has demand information for the past year.
a.    Calculate the EOQ for ordering wheels, and the annual costs of inventory.
b.    Calculate the ROP.

Demand for
Month    Wheels
January    693
February    510
March    795
April    989
May    974
June    1074
July    340
August    706
September    955
October    546
November    620
December    433

Ave. Monthly Demand    719.6
Std. Dev., Monthly Demand    240.3

Other important information:
Yearly holding cost    20%
Ordering cost    $200/order
Service level    95%
Leadtime        0.5 months
Item costs    $40/wheel

A5. Given the product structure tree and the inventory shown below, computer the net requirements for A, B, C, D, E to produce 50 units of X. Set up MRP schedules and show your calculations.

A(1)                B(1)

C(2)        D(1)        D(2)        E(4)

Component    A    B    C    D    E
Inventory    20    10    15    60    100