Q: An industry sells the TV-200 worldwide with most sales in the Northern Hemisp
ID: 433309 • Letter: Q
Question
Q:
An industry sells the TV-200 worldwide with most sales in the Northern Hemisphere. The CEO assumes that TV-200 sales over the previous 24 months to be the best forecasting tool for TV-300 sales in the first 12 months (2019) following introduction.
Monthly sales for the past 24 months (2017+2018) are as follows:
Months
2017
2018
January
10167
9614
February
10279
10325
March
10106
10107
April
9896
9596
May
9807
9596
June
10182
9896
July
24819
25348
August
25141
25050
September
19697
20016
October
19882
19665
November
9993
10066
December
9986
9949
The below table is the forecast for TV-300 sales for the next 12 months (2019)
The TV-300 requires components A, B, and C are assembled in house, but D, E, and F are sourced from vendors with the following shipment times:
What is your ordering strategy for vendor-procured items for 2019??
Months
2017
2018
January
10167
9614
February
10279
10325
March
10106
10107
April
9896
9596
May
9807
9596
June
10182
9896
July
24819
25348
August
25141
25050
September
19697
20016
October
19882
19665
November
9993
10066
December
9986
9949
Months 2019 ebruary 11541.8 March 11322.8 Mily June 1???? 11246.8 August 28115.5 Septemb 22246.5 October 22152.9 Novembe r 11236.6 Decembe 11167Explanation / Answer
Answer:
Ordering strategy for vendor procured items for 2019:
The aim of the ordering strategy is as below
On time availability of parts for production and avoid any delay due to parts.
Lowest possible storage and holding cost.
Keep safety stock to manage the uncontrolled variations in the ordering and supply chain process and ensure that production is not affected due to non-availability of parts.
Lowest ordering cost for the organization.
Lowest supply chain cost for the organization.
The ordering strategy for the vendor procured items for 2019 will be as such
The ordering strategy will be developed for the vendor procured parts such as D, E & F parts.
The ordering strategy will be based on the lead time of the parts i.e. D-two weeks, E-one week and F-one week.
Ordering strategy will be based on the monthly volume consumption of parts or as per forecasted demand.
Ordering strategy will be based on optimum ordering quantity concept which ensures the lowest cost of order management, lowest inventory management cost, lowest holding cost and lowest supply chain cost.
Ordering strategy will ensure that there is no inventory accumulation and will not have adverse impact on the material cost for the organization.
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