Supply chain

Version A You have just been promoted to interim director of supply chain Management. You wish to keep your job. You first assignment has been to decide on whether to stay with your current system or switch to a new system. The Kenosha, Wisconsin plant has an annual demand of 100,000 units (400 units per day), gross revenues per order of $400; with a cost of $150 per unit; however, when there is a stock-out only 75% of the customers are willing to accept a backorders. Whenever there is a stock-out you have a re-handling fee of $200 per unit; along with this, as a policy you give your customers an invoice deduction of $50 per backorder. Your normal inventory carrying rate is 30%. The current system has an average order cycle time of 10 days, with a standard deviation of 3 days. It also has a service level (on time delivery rate) of 90%, with transportation cost of $800,000 and other operating cost of$3,200,000. The new system would have an average order cycle time of 4 days, with a standard deviation of 1 day. It would have a service level (on time delivery rate) of 98%, with transportation cost of $2,000,000 and other operating cost of$3,400,000. 1.Referring to Financial Impact A. Considering that the only variance is in the supply, what is the required safety stock for the current process? 2.Referring to Financial Impact A. For the current process, and using the previously calculated amounts along with deducting the given Transportation Cost and Other Operating Cost, what are the Earnings Before Interest & Taxes of the current process 3.Referring to Financial Impact A. For the new system what are the Service Failures 4.Referring to Financial Impact A. For the new system what are the Total Sales 5.Referring to Financial Impact A. For the current process what are the Invoice Deductions 6.Referring to Financial Impact A. For the current process what is the number of Orders Fill Correctly 7.Referring to Financial Impact A. For the new system what are the Lost Sales 8.Referring to Financial Impact A. For the current process what is the Net Orders Sold 9.Referring to Financial Impact A. For the current process what is the Gross Margin 10.Referring to Financial Impact A. For the current process what are the Net Sales 11.Referring to Financial Impact A. For the new system what is the Orders Fill Correctly 12.Referring to Financial Impact A. Considering that the only variance is in the supply, what is the required safety stock for the new process? 13.Referring to Financial Impact A. For the current process what is the Total Sales 14.Referring to Financial Impact A. For the current process what are the Lost Sales Revenues 15.Referring to Financial Impact A. For the current process what is the Service Failures 16.Referring to Financial Impact A. For the current process what is the Total Inventory (units) 17.Referring to Financial Impact A. What is the average demand inventory for the new process? 18.Referring to Financial Impact A. For the new system what are the Rectified Orders 19.Referring to Financial Impact A. For the current process what is the Re-handling Cost 20.Referring to Financial Impact A. For the current process what is the Inventory Cost 21.Referring to Financial Impact A. For the new system what is the Net Orders Sold 22.Referring to Financial Impact A. For the current process what is the Lost Sales 23.Referring to Financial Impact A. For the current process what are the Rectified Orders 24.Referring to Financial Impact A. For the new system what is the Total Inventory (units) 25.What is the average demand inventory for the current process? Petland, a regional pet store chain, estimates that sells 2912 24-pound bags of Kibble Limited-Ingredient Formula Adult Dry Dog Food per year. Each 24-pound bag costs the retailer $36; with a carrying cost rate of 28%; and ordering costs of $117 per order. 1.What is the EOQ? 2.What is the total cost 3.What is the optimum order period? (Weeks)