Tesla marketing forecasts the sales of its cars for

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Tesla Marketing forecasts the sales of its cars for the next five quarters as follows below. The forecast provides
the demand share between the two Tesla models and the total cars forecasted for the family.
Forecast
Quarter 1,
2014
Quarter 2,
2014
Quarter 3,
2014
Quarter 4,
2014
Quarter 1,
Tesla Model 60
70% 60% 50% 40%
Tesla Model 85
30% 40% 50% 60%
Total Units
Sales (# of Cars)
7,500
9,750 BP’s
8,000
11,200 BP’s
8,600
12,900 BP’s
9,300
14,880 BP’s
10,000
17,000 BP’s
Tesla Marketing also provided a forecast for individual replacement battery pack sales is:
Forecast Quarter 1,
2014
Quarter 2,
2014
Quarter 3,
2014
Quarter 4,
2014
Quarter 1,
2015
Forecasted
Sales of
Replacement
Battery Packs
2,400 2,700 3,000 3,400 3,800
1. (5 Points) What is the total requirement for battery packs for each quarter of 2014 that Tesla should
receive from Panasonic in Japan? Insert your responses in the matrix below and explain your answer in
the space provided.
2015
30%
70%

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2. (3 Points) What is the forecasted dependent demand for battery packs to be received by Tesla in the
second half (quarters 3 and 4) of 2014?
3. (3 Points) What is the forecasted independent demand for battery packs to be received by Tesla in
Quarter 1, 2015?
4. (5 Points) Using the total number of projected battery packs to be received by Tesla in 2014 (in your
response to #1 above), calculate an Economic Order Quantity (EOQ) for the battery packs.
5. (5 Points) In consideration of the re-order point ordering process already in use, and the EOQ you
calculated in # 4. above, explain how the ROP and EOQ should be used by Tesla’s Inventory
Management (IM) team in their planning. Be specific with your explanation.

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6. (5 Points) What is Tesla’s total annual inventory cost (hold ing costs and order costs) for battery packs?
Be sure to consider safety stock in your response.
7. (7 Points) Tesla’s CEO, Elon Musk, is troubled that recently Tesla has had occasional shortages of the
Battery Packs, even after he directed his staff to achieve a 99% service level. Does the IM Team’s
current process support such a service level? If yes, show your analysis and reasoning clearly below.
no, suggest changes to IM’s process to achieve the 99% service level, again using sound analysis and
reasoning in your answer.
If