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JGT Task 2

Decent Essays

Memorandum to: Cynthia Crownshield from: subject: Production Analysis date: cc: Alistair wu, Dieter Handel, Distribution Pattern Alistair Wu has requested that I look at what the lowest shipping schedule and cost can be based on data that he has provided. He wants to know what the lowest possible cost of shipping will can be. Mr. Wu is also considering increasing production at the Shanghai factory from 1,300 to 2,800 units, and wants to ensure that this growth will be an affordable choice. The first chart that was given lists the factory capacity and what each warehouse demand is. The second chart lists the price of shipping from each factory to each warehouse. The chart looks at the demand in the warehouses as well as the cost to …show more content…

They use 300,000 shoelaces per year with an estimated cost of $125 for every order to the suppliers. The estimated holding cost of each pair of laces is $.10.In order to help her with this; I used the economic order quantity model (EOQ). The annual expenses for ordering and storing the inventory will be $1,369.31. The optimal inventory that they should keep on hand should be 27,386 and the average inventory around 13,693. Ms. Down should order the optimal level of shoelaces 11 times a year to avoid shortages. C2. Computer Analysis C2a. Decision Analysis Tool Justification The economic order quantity is used for this situation because it shows the number of pairs of laces that can be added to the inventory each time an order is placed to minimize the holding and ordering costs. It provides the information that can be used to control the inventory levels and costs. D. Waiting Line System Shuzworld aims to keep customer satisfaction at its highest. A customer approach that focuses on making the customer happy is of upmost importance. One way to achieve this is to ensure that customer wait time is kept to a minimum. Specific questions have been posed for concern; how many customers will be in the system; how many customers on average will be in line; and what the probability is of one being in line or being served? The company is looking at staffing each

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