SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,000 units. Each shirt requires 0.5 pounds of raw cotton that is imported from Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $2.50 (paid only when the cotton arrives at SYM’s facilities) and transportation cost by sea is $0.20 per pound. The traveling time from LGT’s facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $100 and the annual interest rate that SYM is facing is 20 percent. a. What is the optimal order quantity of cotton?b. How frequently should the company order cotton?c. Assuming that the first order is needed on April 1, when should SYM place the order?d. How many orders will SYM place during the next year?e. What is the resulting annual holding cost?f. What is the resulting annual ordering cost?g. If the annual interest cost is only 5 percent, how will it affect the annual number oforders, the optimal batch size, and the average inventory? (You are not expected toprovide a numerical answer to this question. Just describe the direction of the changeand explain your answer.)
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,000 units. Each shirt requires 0.5 pounds of raw cotton that is imported from Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $2.50 (paid only when the cotton arrives at SYM’s facilities) and transportation cost by sea is $0.20 per pound. The traveling time from LGT’s facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $100 and the annual interest rate that SYM is facing is 20 percent.
a. What is the optimal order quantity of cotton?
b. How frequently should the company order cotton?
c. Assuming that the first order is needed on April 1, when should SYM place the order?
d. How many orders will SYM place during the next year?
e. What is the resulting annual holding cost?
f. What is the resulting annual ordering cost?
g. If the annual interest cost is only 5 percent, how will it affect the annual number of
orders, the optimal batch size, and the average inventory? (You are not expected to
provide a numerical answer to this question. Just describe the direction of the change
and explain your answer.)
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