# Assignment Problems (82 points in total): Company E sells personal computers.

June 5, 2016

Question
Assignment Problems (82 points in total):

1. Company E sells personal computers. The monthly sales for the previous 4 months are summarized as follows:

Month

Actual Sales

May

20,000

June

18,000

July

20,000

August

24,000

(a) Compute the sales forecast for September using a 3-month moving average. Please include at least one step of calculation and the correct answer for full credit. (4 points)

(b) Compute the sales forecast for September using a weighted 3-month moving average using 0.20 for June, 0.30 for July, and 0.50 for August. Please include the formula, at least one step of calculation and the correct answer for full credit. (6 points)

(c) Suppose the forecast for August was 20,000 units. Using a smoothing constantα= 0.2, compute the sales forecast for September. Please include the formula, at least one step of calculation and the correct answer for full credit. (6 points)

2. Suppose the revenue for a firm is \$2,500,000. Its cost of goods sold is \$85,000, and its average inventory value for the year is \$62,000. What is the firm’s inventory turnover?

Please include the formula, at least one step of calculation, and the correct answer for full credit. (6 points)

3. Given the following information, compute the economic order quantity of the inventory system.

Annual Demand

50,000 units

Order Cost

\$150 per order

Unit Cost

\$100 per unit

Inventory Holding

10% of unit cost

Please include the formula, at least one step of calculation, and the correct answer for full credit. (6 points)

4. Company X can purchase a certain component from either Supplier A or Supplier B. Supplier A charges \$10 per unit for the first 2,000 units in an order, \$9 per unit for the next 2,000 units in the order, and \$8 per unit for any unit beyond. Supplier B charges \$9 per unit for orders of no more than 4,000 units and \$8.5 per unit for any bigger orders.

(a) Suppose Company X decides to buy 5,500 units from Supplier A. What is the average unit cost of the order? Please provide at least one step of calculation and the correct answer for full credit. (4 points)

(b) If Company X wants to place an order of 5,500 units, which supplier offers a lower total cost. Provide the reason for full credit. (4 points)

5. Please do your own research and provide a brief discussion of no less than 150 words regarding the relationships among VMI, EDI, and Continuous Replenishment. (6 points)

6. An assembly line is to operate 8 hours a day with a desired daily output of 240 units. The following table contains information on this product’s task times and sequential relationships:

Immediate Predecessor

A

40

—–

B

30

A

C

20

A

D

50

B

E

60

D

F

20

C

G

40

E, F

H

50

G