For one (1) of the two (2) situations set out above, write a three to four (3-4) page memorandum to President Howard. Ensure that you address each of the questions below within your memo so that President Howard may assess whether or not Simply Green Prod
September 29, 2021English
September 29, 2021
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Safety Stock and Reorder Point
Consider the following data.
| Inventory Item |
Average Demand (Annual) |
Sigma (Std. Dev.) of Demand During Lead Time |
Item Unit Cost |
| F-11001 |
15,000 |
100 |
$250.00 |
| K-12002 |
100,000 |
300 |
$2.00 |
| L-13003 |
250,000 |
200 |
$0.20 |
| N-14004 |
300,000 |
400 |
$1.00 |
| P-21001 |
50,000 |
60 |
$125.00 |
| S-22002 |
80,000 |
75 |
$30.00 |
Note: All items are independent demand items.
Based on the above data:
- Calculate the safety stock quantities and the inventory cost associated with safety stock (based on the item unit cost) for the inventory items at four different service levels (50%, 80%, 90%, and 95%).
- Develop a table to present the inventory quantities and the safety stock costs at each service level.
- Assuming that demand occurs at a steady pace every month (in other words, there is no seasonality or cyclical change in the level of demand), calculate the reorder point for each item assuming a lead time of two months and a service level of 90%.
- Develop a table to present the reorder points for all products under these conditions (two month lead time and service level of 90%).
Support your responses with examples.
Needs to have in-text citations and complete reference list. The paper, in-text citations, and reference list needs to be in APA format. No plagiarism.
| Assignment 2 Grading Criteria |
Maximum Points
|
| Developed a table showing the safety stocks, and inventory costs associated with the safety stocks, for each product at each service level. |
30
|
| Developed a table showing the reorder points for each product at a 90% service level (assuming a two month lead time). |
15
|
| Used correct spelling, grammar, and professional vocabulary. Cited all sources using APA format. |
5
|
| Total: |
50
|
|
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