StudentShare solutions
Triangle menu

Demand and Stores - Coursework Example

Not dowloaded yet

Extract of sample
Demand and Stores

Therefore, the average daily demand during lead time is equal to L ? AVG. The safety stock is determined scientifically and is applied with the average daily demand during lead time to ensure that there is an adequate supply of inventory is in stores to prevent a loss of sale due to stock-out. The safety stock, which is the minimum level to which stock is expected to fall, is represented by the formula: z ? STD ? vL It is expected that inventory will fall to this minimum level just before the order for Q is received. Immediately after the order for Q units is received the inventory will return to its maximum level but will be depleted over time based on the average daily demand (AVG). The reorder level depends on AVG which is reviewed continuously. When Q units are added to the safety stock the maximum inventory level is achieved. This inventory is depleted over time. Therefore, it is expected that the expected level of inventory before receiving the order is: z ? STD ? vL While the expected level of inventory immediately after receiving the order is: Q + z ? STD ? vL Solution to Question 2 The periodic review inventory replenishment policy requires that inventory be reviewed periodically at regular intervals and that an appropriate quantity is ordered so as to achieve the base stock level after each review. This level of inventory should be sufficient to cover demand during the review period (r) and the lead time (L), in order to prevent stock out before the next order arrives. This implies that the base-stock level includes the average demand during the combined interval of r + L which is: (r + L) ? AVG as well as the safety stock which is calculated as: z ? STD ? v(r+ L) According to Simchi-Levi et al (2008), the maximum inventory level is reached immediately after receiving an order while the minimum level of inventory is reached just before receiving the order. It is therefore very clear that the expected level of inventory after receiving an order is equal to: r ? AVG + z ? STD ? v(r+ L) while, the level of inventory immediately before order arrives is: z ? STD ? v(r+ L) which is the safety stock. Solution to Question 3 The target service level defines the percentage of orders received that must be filled. A good criterion that can be used is price. The five products that I sell in my department store are: shoes, clothes, appliances, furniture, and food items. In order of target service level from lowest to highest they will be listed as follows: Furniture – more expensive than all other items, profit margin is low, volume is relatively low, demand variability and lead time is high. Appliances – less expensive than furniture but tend to be more expensive than all other items, profit margin is high compared to furniture, volume medium range, while both demand variability and lead time is relatively high Foot-wear – the profit margin is high, volume relatively high, demand variability is not as low as with clothes, and lead time is not as low as with clothes Clothes – the profit margin is high, volume relatively high, demand variability is also relatively low while lead time may not be as low as with food items. Food items – they are cheaper than all other items; the profit margin tend to be low but turnover rate and volume is high, both demand variability and lead time is generally low. According to Simchi-Levi (2008) the service level is generally higher for products with high profit margin, high volume, low variability ...Show more

Summary

Name: Course: Instructor: Date: Demand and Stores Solution to Question 1 According to Simchi-Levi et al (2008) under a continuous review inventory replenishment policy, inventory is continuously monitored and an order for Q units is placed when the inventory level reaches the reorder point that has been established…
Author : lueilwitzitzel
Demand and Stores essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the coursework on your topic
"Demand and Stores"
with a personal 20% discount.
Grab the best paper

Related Essays

Price elasticity of demand refers to how sensitive the amount of a goodor service
On the contrary, a produce with little or no close substitutes will have inelastic demand since the customers have no other produce to adjust to. Price elasticity of demand (Ed) = percentage in amount demanded Percentage of change in price = ?qd/qd ? (?p/p)-1 Ed gives ?
13 pages (3250 words) Coursework
Analisys of demand and supply affecting Shell Oil
The company’s performance has remained a casualty as the FTSE 100 wafted lower for a second straight day. The company’s expectations have been compromised ahead of release of full- year results that sent its B share 2 percent lower (Elder, 2012). The major forces driving the demand for oil include lower refining margins, higher upstream maintenance costs, exploration write-downs and a weak European gas market.
5 pages (1250 words) Coursework
PPF CURVE AND FOREIGN INVESTING/SUPPLY AND DEMAND FOR COFFEE/SUPPLY AND DEMAND DEFINITION FOR 10 DIFFERENT SCENARIOS
Assume you are a developing country, producing food and clothing at maximum capacity. What could happen when foreign investors start investing in your country? Production priority frontier (PPF) is a curve that shows the combination of two or more goods that could be produced using available resources (Tutor2u).
6 pages (1500 words) Coursework
BMW Automobiles. BMW Demand and Supply
This has remained to be the marquee brand of the BMW group, which is also the most profitable to the company. This article looks at the micro and macro-economic analysis of the BMW 3 Series as well as possible solutions to the company in order to boost supply for their car brand.
6 pages (1500 words) Coursework
Case 5.1 Levi Strauss Signature: A new Brand for Mass-Channel Retail Stores pp 621-625 Individual Case Study Report & Refl
The purpose of this assignment is to analyze the international market of Levis along with the assessment of risk elements such as political, economic and socio-cultural in the international markets. Moreover, the distribution of the company in the European market has also been taken into consideration of this study.
18 pages (4500 words) Coursework
FUNDAMENTALS OF ECONOMICS Using diagrams, explain what happens to PRICE and QUANTITY when Demand increases and Supply increases, and when Supply falls and Demand increases
So, if the price falls, quantity demanded will rise and if the price rises demand for that certain good will decrease. However, the case is different if we put supply in the picture. Market equilibrium exists when the quantity supplied is equal to the quantity demanded at a given price ("Excess Demand and Supply").
5 pages (1250 words) Coursework
Individual case study report on London Eye, Capacity Management:forecasting demand and yield management
The report will then focus on the recommendations that London eye should concentrate on to improve in its competitiveness. The recommendations include the use of advanced technology and people process strategies. The people process strategy
8 pages (2000 words) Coursework
Workforce demand/supply forecasting
As Australian industries seek to generate more revenue inside and outside the country, the future workforce demand is expected to rise in the future. It is approximated that the demand will go up by 7.1% by the year 2017. The increase in workforce demand has
1 pages (250 words) Coursework
Is it necessary to use both demand and supple side policies to manage the uk economy
In this essay, I am going to discuss separately how the supply side policies and demand side policies can help to improve on the economy of the Britain. The demand side
6 pages (1500 words) Coursework
The Aggregate-Demand / Aggregate-Supply Model
If the scenario reduces consumption, government purchases, net exports and investments at given price level, it decreases the aggregate demand. The curve pf
1 pages (250 words) Coursework
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation