****Just need help on the executive summery. Can’t figure out where to start, what information to list from the

excel spreadsheet. Please HELP!!!********

ABC Company stocks and ships to their retailers a product (KB456) each week. The Product

KB456 costs $150 per unit and is sold to the retailers for $230 per unit. Units not sold during

one week are held over and sold the next week at a cost of $15 per unit, charged on beginning

inventory. The company also charges itself $12 per unit for any lost sales. The fixed cost for the

operations is $2,000 per week. The company wants to maximize profits.The demand for product KB456 follows a uniform distribution with a minimum of 150 units and a maximum of 200 units. The company is considering three possible order levels. These are

170, 175, or 180 units per week. Beginning inventory is zero.

Project #1 – Format
Executive Summary

Problem
Recommendation
Risk
Next Steps

Model

#1 – One Year
Model #2 – 30 (One Year) Summaries
Exhibits



Graphs
Statistical Summaries

Detail


Formulas

Baseline questions:

What is Breakeven?
What if Demand is 10% lower?
What if Demand is 10% higher?
What is Optimal Range Order Point?
Which Order Point drives the least Lost Sales?
Which Order Point drives the least “Carryover” Inventory?
What if demand band narrowed by 10%?
What is the least profit with the current demand level?
Impact on profit if order level drops by 10%
What is your “Final” recommendation?

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