Hints relating to Storage Record Case

26 Aug

Author: DJEquip // Category: Home Recording Studio Equipment

Bought for a birthday gift, for a retro loving grandaughter, who already has the albums and record player. She was thrilled to have this case to store & carry them in. It is not too big & heavy to carry around, and seems pretty sturdy.

Need someone to check my work on an Operations Management question. I need a perfect score on this case study.?
Sturdivant Sound Systems manufactures and sells sound systems for both home and audio. All parts of the sound systems, with the exception of CD players, are produced in the Rochester, New York, plant. CD players used in the assembly of Sturdivant’s systems are purchased from Morris Electronics of Concord, New Hampshire.The purchasing agent for Sturdivant Sound Systems submits a purchase requisition for the CD players once every four weeks. The company’s annual requirements total 5,000 units (20 per working day), and the cost per unit is $60. (Sturdivant does not purchase in greater quantities because Morris Electronics, the supplier, does not offer quantity discounts.) Rarely Storage Record Case does a shortage of CD players occur because Morris promises delivery within one week following receipt of a purchase requisition. (Total time between date of order and date of receipt is 10 days).Associated with the purchase of each shipment are procurement costs. These costs, which amount to $20 per order, include the costs of preparing the requisition, inspecting and storing the delivered goods, updating inventory records, and issuing a voucher and a check for payment. In addition to procurement costs, Sturdivant Sound Systems incurs inventory carrying costs (aka Holding Costs) that include insurance, storage, handling, taxes, and so forth. These costs equal $6 per unit per year.Beginning in December of this year, management of Sturdivant Sound Systems will embark on a company-wide cost control program in an attempt to improve its profits. One area to be closely scrutinized for possible cost savings is inventory procurement.a.Compute the EOQ (aka Optimal Order quantity) of CD players.b.Determine the appropriate reorder point (in units).c.Compute the costs savings that the company will realize if it implements the optimal order inventory procurement decision.My answers:a) Q0 = the square root of 2x(5000)x20/6 = 183 CD playersb) ROP = 20×10 = reorder when only 200 CD players remainc) TC = (183/2)x6 + (5000/183)x20 + 60×5000 = $301,095 TC400 = (400/2)x6 + (5000/400) + 60×5000 = $301,450Thus, the company can save $355 per order if it uses the EOQ number of 183 CD players.If I’ve made an error, please let me know where and how to fix it. Thanks for your time!
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