J
Josh S
Guest
I am really struggling with this problem and would really like any help that i can get or even partial help! Anything is better than nothing!!
A company is exporting a product from Sweden to Australia. In the logistics system inventory
is occurring at three different places:
• Production inventory in Sweden
• During transportation
• Selling- and safety stock in Australia
The product has a manufacturing cost of SEK 100 per unit. Yearly demand is 7 391 250 units.
Important information
• The product is being produced in lots as big as one shipment
• The production capacity is 60 750 units/day
• The production goes 365 days/year
• The production is being set up in order to create as little capital employed as possible
• The goods are shipped every 4 weeks
• The transit time is 8 weeks
• The cost for transportation, taxes, customs etc are SEK 35 for each unit
• In Australia we need a safety stock containing the demand for 3 weeks.
• The inventory carrying cost is 25% per year. As no information exists about capital cost,
use the inventory carrying cost also for calculating cost during transportation.
• Ordering costs in Australia is SEK 5 200
Calculate:
a) Costs for inventory in Sweden (3 points)
b) Costs for inventory during transportation (3 points)
c) Costs for inventory in Australia (3 points)
d) Total inventory turnover (IT) – times/year (total for all inventories including transport) (2 points)
e) Total average throughput time in days (total for all inventories including transport) (2 points)
f) Is the situation today optimal for the company in Australia according to the Economic
order quantity (EOQ) formula? If not, what is the Economic order quantity (3 points)
g) What are the total costs per year for inventory and ordering today? (2 points)
h) What are the total costs per year for inventory and ordering at Qopt? (2points)
A company is exporting a product from Sweden to Australia. In the logistics system inventory
is occurring at three different places:
• Production inventory in Sweden
• During transportation
• Selling- and safety stock in Australia
The product has a manufacturing cost of SEK 100 per unit. Yearly demand is 7 391 250 units.
Important information
• The product is being produced in lots as big as one shipment
• The production capacity is 60 750 units/day
• The production goes 365 days/year
• The production is being set up in order to create as little capital employed as possible
• The goods are shipped every 4 weeks
• The transit time is 8 weeks
• The cost for transportation, taxes, customs etc are SEK 35 for each unit
• In Australia we need a safety stock containing the demand for 3 weeks.
• The inventory carrying cost is 25% per year. As no information exists about capital cost,
use the inventory carrying cost also for calculating cost during transportation.
• Ordering costs in Australia is SEK 5 200
Calculate:
a) Costs for inventory in Sweden (3 points)
b) Costs for inventory during transportation (3 points)
c) Costs for inventory in Australia (3 points)
d) Total inventory turnover (IT) – times/year (total for all inventories including transport) (2 points)
e) Total average throughput time in days (total for all inventories including transport) (2 points)
f) Is the situation today optimal for the company in Australia according to the Economic
order quantity (EOQ) formula? If not, what is the Economic order quantity (3 points)
g) What are the total costs per year for inventory and ordering today? (2 points)
h) What are the total costs per year for inventory and ordering at Qopt? (2points)