1.)The Purchasing / Materials Department have not been doing their job. Inventory levels have not been managed. Assembly outages have caused the group to just order “large quantities” of raw materials to make sure the build is not disrupted. There appears to be a major opportunity for cost saving by reducing our inventory and using our EOQ Model we introduced last week.
Calculate the annual demand for each component of Model A and Model C
Calculate the EOQ for each component of Model A and Model C
Different from last week, use the cost for the Legos … 1 x 1 piece = $0.12
Adjust inventory levels as compared to current on-hand quantities of each component
Calculate inventory costs saving based on your EOQ calculation
Deliverable for this Section:
Summary demand for Model A and Model C of annual demand
Table showing your EOQ calculations for each Lego component of Model A and Model C
Table showing savings … comparing current inventory with proposed (EOQ calculated inventory). Note there are at least three areas of savings: material savings, holding savings, and ordering savings.
2.) Time to do some investigating and research. Devise a plan how we can work with our Lego supplier(s) to improve quality, delivery, innovation, and / or service.
Deliverable for this Section:
One page (detailed plan) on Supplier Development / Supplier Certification.
*Information needed is attached
