TStar is a main OEM supplier in the US and it has currently a single distribution center (DC) located in Houston, TX. TStar is currently considering to add a new alternator that is used for passenger vehicles into its product line.
TStar is a main OEM supplier in the US and it has currently a single
distribution center (DC) located in Houston, TX. TStar is currently considering to add a new alternator that is used for passenger vehicles into its product line. Based on the past data it is estimated that demand for the alternator will follow a normal distribution with mean equal to 900 units per month and standard deviation equal to 95 units per month. It is assumed that inventory holding cost per alternator per year is $90. In addition, TStar pays $500 each time when it place an to buy it from its supplier. The supplier lead time is 3 months. The current customer service level target is 97%. Considering information provided above
1.- Calculate the economic order quantity, EOQ at the DC.
2.- Calculate safety stock, ss.
3.- Calculate the reorder point, ROP.
4.- Calculate the total cost adding this new alternator into product line
PLEASE ANSWER IN EXCEL FILES WITH FORMULAS FOR EACH ANSWER
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