Case2 Solution

76 3114 3144 4164 3697 3476 eoq rop calculations 3

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Unformatted text preview: n MacCoy & MacCoy 86 proof Scotch Triple 7 86 proof Blended Whiskey Blanchard's 80 proof Ron Cores Rum Carrying New Annual cost Setup Unit EOQ Demand 2 RS cost (S ) Cost (C ) percentage CK (R ) (K ) New ROP 3. 5 52 vR EOQ as per 1969 ROP as per 1969 4289 69.10 31.14 11.5 407 289 327 165 2782 69.03 31.44 11.5 326 187 248 96 538 71.19 41.64 11.5 126 36 170 54 3241 70.57 36.97 11.5 328 218 346 208 610 70.28 34.76 11.5 146 41 137 30 2) What are the advantages / disadvantages of the EOQ/ ROP system and the system used at Blanchard? Which system do you prefer? EOQ/ ROP system: Advantage1) The system achieves the balance between two costs ordering cost and the carrying cost. 2) The system keeps track of removals from inventory on a continuous basis, so the system can provide information on the current level of inventory for each item 3) The system helps meet the anticipated customer demand. 4) The system keeps buffers between successive operations to maintain continuity of production (reducing the variability in demand at various stages). Disadvantage1)...
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This document was uploaded on 01/29/2014.

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