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  • Quantitative Steps

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    Roy Hatague
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    The document summarizes quantitative steps to determine the optimal order quantity and frequency to prevent stock outs given an unreliable supplier. It develops an economic order quantity (EOQ) model using data on annual demand, order costs, holding costs, and unit costs from Western Ranchman Outfitters. Testing shows EOQ recommends 11 orders of 182 jeans pairs, while Randall's policy recommends 12 orders of 167 pairs. However, given the supplier only delivers 65% of orders, the EOQ must be adjusted upwards to account for the unreliable supplier. It is recommended WRO increase orders to 280 pairs to hopefully receive their needed 182 pairs.

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    The document summarizes quantitative steps to determine the optimal order quantity and frequency to prevent stock outs given an unreliable supplier. It develops an economic order quantity (EOQ) model using data on annual demand, order costs, holding costs, and unit costs from Western Ranchman Outfitters. Testing shows EOQ recommends 11 orders of 182 jeans pairs, while Randall's policy recommends 12 orders of 167 pairs. However, given the supplier only delivers 65% of orders, the EOQ must be adjusted upwards to account for the unreliable supplier. It is recommended WRO increase orders to 280 pairs to hopefully receive their needed 182 pairs.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato DOCX, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    64 visualizzazioni1 pagina

    Quantitative Steps

    Caricato da

    Roy Hatague
    The document summarizes quantitative steps to determine the optimal order quantity and frequency to prevent stock outs given an unreliable supplier. It develops an economic order quantity (EOQ) model using data on annual demand, order costs, holding costs, and unit costs from Western Ranchman Outfitters. Testing shows EOQ recommends 11 orders of 182 jeans pairs, while Randall's policy recommends 12 orders of 167 pairs. However, given the supplier only delivers 65% of orders, the EOQ must be adjusted upwards to account for the unreliable supplier. It is recommended WRO increase orders to 280 pairs to hopefully receive their needed 182 pairs.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato DOCX, PDF, TXT o leggi online su Scribd
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    di 1

    SUMMARY OF QUANTITATIVE STEPS Defining the Problem How to determine the frequency and quantity of order to prevent stock

    out given the unreliability of supplier in meeting the ordered quantity? Developing a Model Inventory techniques are used in generating the optimum quantity that must be order so that the holding and order cost is maximized. Acquiring Input Data The data that is used are obtained from Western Ranchman Outfitters (WRO). These are the annual demand, order cost, holding cost, and unit cost. Developing a Solution The inventory technique that is used are Economic Order Quantity, Randells ordering policy, and Suppliers Delivery Pattern. Testing the Solution Based on the EOQ, the total times that WRO should order to Levi Strauss is 11 with 182 pairs of jeans. In comparison, Randalls ordering policy is to order 12 times in a year with 167 pairs of jean to compensate with the unreliable delivery of the supplier. Analyzing the Results Based on the historical data, only 65 percent is being received from the supplier. Hence, the EOQ must be adjusted in order to attain the order that WRO wants. Implementing the Results The ordering quantity must be adjusted. From 182 pairs of jeans to be ordered, it is recommended to increase it to 280 in the hope that they will deliver the 182.

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