LOG203 Singapur University Inventory Management Inventory Calculations Question 2 A grocery store has a monthly demand of 750 chocolate bars. It buys the

LOG203 Singapur University Inventory Management Inventory Calculations Question 2

A grocery store has a monthly demand of 750 chocolate bars. It buys the bars from the

distributor at price of $60 per bar. It calculated that keeping a bar in stock, costs around 67

cents per month. Each time it places an order to the distributor, there is a processing fee of

$160. The distributor offered the store a discounted price of $56 per chocolate bar if it orders

300 bars each time. Solve to determine whether the store should take the offer.

In your answer, compare the two scenarios in tabular form and include the following:

(i) Lot size

(ii) Average inventory

(iii) Number of orders per year

(iv) Purchase cost

(v) Carrying cost

(vi) Ordering cost

(vii) Total Cost

(viii) Savings

– I need full formulas and workings and probably explanations LOG203
Inventory Management
Group-based Assignment
July 2019 Presentation
[LOG203]
Group-based Assignment
GROUP-BASED ASSIGNMENT
This assignment is worth 38% of the final mark for LOG203 Inventory Management.
The cut-off date for this assignment is 6 October 2019, 2355hrs.
This is a group-based assignment. You should form a group of 4 members from your seminar
group. Each group is required to upload a single report via your respective seminar group site
in Canvas. Please elect a group leader. The responsibility of the group leader is to upload the
report on behalf of the group.
It is important for each group member to contribute substantially to the final submitted work.
All group members are equally responsible for the entire submitted assignment. If you feel that
the work distribution is inequitable to either yourself or your group mates, please highlight this
to your instructor as soon as possible. Your instructor will then investigate and decide on any
action that needs to be taken. It is not necessary for all group members to be awarded the same
mark.
Note to Students:
You are to include the following particulars in your submission: Course Code, Title of the
GBA, SUSS PI No., Your Name, and Submission Date.
Important Note: Grading of GBA Submission
Marks awarded to your assignment are based on the following guidelines:
1. 80 marks are allocated to the content of your answers:
? The marks awarded to what your answers cover depend on the extent to which they
cover the key points that correctly and comprehensively address each question.
? The key points should be supported by evidence drawn from course materials and,
wherever relevant, from other credible sources.
2. 20 marks are allocated to the presentation of your answers:
Wherever applicable, the marks awarded to how your answers are presented depend on
the extent to which your answers:
? form a sound reasoning by developing those key points in a clear, logical and succinct
manner;
? provide proper and adequate in-text citations and referencing to content drawn from
course materials and other credible sources;
? strictly follow APA formatting and style guidelines1, in particular for:
?
in-text citations and end-of-report references;
1
You can find a short tutorial on the APA formatting and style guidelines here: https://is.gd/mgEOnC .
Additional details (pertaining to tables and figures) can be found here: https://is.gd/O4vDdT .
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS)
Page 2 of 5
[LOG203]
?
Group-based Assignment
the identification of figures and tables;
? use, wherever relevant, the specialised vocabulary and terminology commonly used in
discussions about the topic(s) covered by each question;
? provide a reference or bibliography at the end of the main report;
? include the less relevant details in an Appendix;
? use sentence constructions that are grammatically and syntactically correct;
? are free from spelling mistakes; present the workings, numerical formulations and
results in a logical manner that follows the APA formatting and style guidelines;
? design and present graphs, diagrams and plots that follow the APA formatting and style
guidelines;
? are highly original;
? have proper formatting, which may:
?
include a properly formatted cover page;
?
respect the answer length/word count set out in the assignment guidelines, if any
is prescribed;
?
present answers in paragraphs with proper spacing and page margins;
?
include page numbers and appendices, if necessary.
_________________________________________________________________________
In this assignment, you are assessed on learning outcomes related to knowledge and
understanding as well as on key skills such as:
? Relate the strategies and techniques in inventory management to the work environment.
? Develop the essential knowledge and interpersonal skills to work effectively in a team.
? Demonstrate written proficiency.
___________________________________________________________________________
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS)
Page 3 of 5
[LOG203]
Group-based Assignment
Question 1
(a)
Consider your organisation or one that you are familiar with that holds stock in the
supply chain. Explain the role of stock in this particular organisation. Describe its
importance to this organisation’s business strategy. For context, you should describe
this organisation and the nature of business it is in, as well as its supply chain and
inventory flows. Relate how this organisation controls its stock levels and why it
chooses these particular policies.
(20 marks)
(b)
Stock management is directly impacted by the business trends and business trends are
constantly evolving. Discuss what are the most important trends (at least 3) that are
affecting stock management at the moment. Provide examples.
(10 marks)
Question 2
A grocery store has a monthly demand of 750 chocolate bars. It buys the bars from the
distributor at price of $60 per bar. It calculated that keeping a bar in stock, costs around 67
cents per month. Each time it places an order to the distributor, there is a processing fee of
$160. The distributor offered the store a discounted price of $56 per chocolate bar if it orders
300 bars each time. Solve to determine whether the store should take the offer.
In your answer, compare the two scenarios in tabular form and include the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Lot size
Average inventory
Number of orders per year
Purchase cost
Carrying cost
Ordering cost
Total Cost
Savings
(20 marks)
Question 3
A company which manufactures cooktop stoves needs burners to make the stoves. The
company makes stoves with two burners only. The demand for the stoves 800 units per month.
The supplier for the burner is very unreliable and the lead time for the burners is not fixed.
Based on the previous, it was found that the lead time is normally distributed with mean of 2
months and standard deviation 1 month. The company plans for 90% service level.
(a)
What is the maximum lead time the company will face 90% of the time?
(5 marks)
(b)
What is the mean and standard deviation of lead time demand?
(4 marks)
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS)
Page 4 of 5
[LOG203]
(c)
Group-based Assignment
What is the reorder level and order quantity, if ordering cost is $1000 and holding cost
is $20 per month per burner? Analyse the ordering policy.
(6 marks)
Question 4
(a)
Suppose you are an inventory manager in charge of designing an inventory management
information system. There are lots of information needed to properly manage an
inventory system, but sometimes there can be information overload. Describe what
information are really needed for inventory management.
(10 marks)
(b)
As an inventory manager, you need to forecast demand for products that displays
seasonal demand. Examine whether you need to forecast the random component of the
observed demand.
(5 marks)
—- END OF ASSIGNMENT —-
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS)
Page 5 of 5
LOG203
INVENTORY MANAGEMENT
STUDY GUIDE (5CU)
Course Development Team
Head of Programme
:
A/P Tan Yan Weng
Course Developer(s)
:
Dr Khaw Fook Cheon (SU1-SU6, Chapters 1-10)
Dr Sugoutam Ghosh (SU6, Chapter 11)
Production
:
Educational Technology & Production Team
Curriculum Administration Team
Course Guide © 2018 Singapore University of Social Sciences. All rights reserved.
Study Units © 2018 Singapore University of Social Sciences and John Wiley &
Sons Singapore Pte Ltd. All rights reserved.
No part of this material may be reproduced in any form or by any means
without permission in writing from the Educational Technology &
Production, Singapore University of Social Sciences.
Educational Technology & Production
Singapore University of Social Sciences
463 Clementi Road
Singapore 599494
Release V1.2
CONTENTS
COURSE GUIDE
1. Welcome ……………………………………………………………………………………………….1
2. Course Description and Aims ……………………………………………………………….1
3. Learning Outcomes ……………………………………………………………………………… 3
4. Learning Material ………………………………………………………………………………… 5
5. Assessment Overview ………………………………………………………………………….. 5
6. Course Schedule …………………………………………………………………………………… 7
7. Learning Mode ……………………………………………………………………………………..8
STUDY UNIT 1
The Context and Scope of Inventory Management
Learning Outcomes …………………………………………………………………………….. SU1-1
Overview …………………………………………………………………………………………….. SU1-1
Chapter 1 Stocks and Inventories ………………………………………………………… SU1-2
Chapter 2 Stocks within an Organisation…………………………………………… SU1-11
Summary …………………………………………………………………………………………… SU1-22
STUDY UNIT 2
Methods for Independent, Known Demand
Learning Outcomes …………………………………………………………………………….. SU2-1
Overview …………………………………………………………………………………………….. SU2-1
Chapter 3 Economic Order Quantity …………………………………………………… SU2-2
Chapter 4 Models for Known Demand ……………………………………………… SU2-16
Summary …………………………………………………………………………………………… SU2-23
STUDY UNIT 3
Methods for Independent, Uncertain Demand
Learning Outcomes …………………………………………………………………………….. SU3-1
Overview …………………………………………………………………………………………….. SU3-1
Chapter 5 Models for Uncertain Demand ……………………………………………. SU3-2
Summary …………………………………………………………………………………………… SU3-14
STUDY UNIT 4
Information Management for Inventory Management and
Demand Forecasting
Learning Outcomes …………………………………………………………………………….. SU4-1
Overview …………………………………………………………………………………………….. SU4-1
Chapter 6 Sources of Information………………………………………………………… SU4-2
Chapter 7 Forecasting Demand …………………………………………………………. SU4-11
Summary …………………………………………………………………………………………… SU4-24
STUDY UNIT 5
Methods for Dependent Demand I
Learning Outcomes …………………………………………………………………………….. SU5-1
Overview …………………………………………………………………………………………….. SU5-1
Chapter 8 Planning and Stocks ……………………………………………………………. SU5-2
Chapter 9 Material Requirements Planning ………………………………………. SU5-12
Summary …………………………………………………………………………………………… SU5-21
STUDY UNIT 6
Methods for Dependent Demand II
Learning Outcomes …………………………………………………………………………….. SU6-1
Overview …………………………………………………………………………………………….. SU6-1
Chapter 10 Just-In-Time ………………………………………………………………………. SU6-2
Chapter 11 Emerging Trends in Inventory Management …………………… SU6-14
Summary …………………………………………………………………………………………… SU6-22
COURSE GUIDE
LOG203 COURSE GUIDE
1. Welcome
(Access video via iStudyGuide)
Welcome to the course LOG203 Inventory Management, a 5 credit unit (CU) course.
This Study Guide will be your personal learning resource to take you through the
course learning journey. The guide is divided into two main sections – the Course
Guide and Study Units.
The Course Guide describes the structure for the entire course and provides you
with an overview of the Study Units. It serves as a roadmap of the different learning
components within the course. This Course Guide contains important information
regarding the course learning outcomes, learning materials and resources,
assessment breakdown and additional course information.
2. Course Description and Aims
Every organisation holds stocks of materials. Stock acts like a buffer to allow for the
variations and uncertainty in supply and demand. Stocks are replenished by
deliveries from suppliers and reduced when demands from customers are satisfied.
Inventory management is responsible for all aspects of stock control. Since keeping a
high level of stock is expensive, organisations are continually looking for ways of
reducing their inventory costs without affecting service imparted to the customers.
This course provides students with an understanding of the principles, processes,
and methods for the effective management of inventory in relation to other activities
in the supply chain. The course examines the policies for independent demand for
an item as well as dependent demand (dependent on other items). Attention is
given to the information needed to design an inventory management information
system and different forecasting techniques.. Some newer advancements in the
inventory management arena are also discussed.
1
LOG203 COURSE GUIDE
Course Structure
This course is a 5-credit unit course presented over 6 weeks.
There are six Study Units in this course. The following provides an overview of each
Study Unit.
Study Unit 1 – The Context and Scope of Inventory Management
This study unit introduces the concept of inventory management and discusses the
ideas behind stocks and their control. We look at the role of stocks within an
organisation and shows how inventory managers need to work within the aims and
constraints set by the broader organisational context.
Study Unit 2 – Methods for Independent, Known Demand
This study unit presents the classic Economic Order Quantity (EOQ) model of
inventory control that takes an idealised stock and calculates the fixed order size
that minimises costs. We cover methods for controlling stock when the demand
and costs take fixed values that are known in advance, i.e. deterministic models .
Study Unit 3 – Methods for Independent, Uncertain Demand
Supply chains often experience uncertainty in stocks due caused by changes in
customer demand, product obsolescence, new technology and supply chain
disruptions, among other factors. This study unit introduces uncertainty into the
independent demand methods. The models discussed here are designed to cater for
variables that are not known exactly but follow known probability distributions.
Study Unit 4 – Information Management for Inventory Management and Demand
Forecasting
Models for inventory management need accurate information to work properly. This
study unit discusses the information provided by accounting, procurement and
warehousing which inventory managers need. Inventory decisions become effective
at some point in the future, so they rely on forecasts of prevailing conditions. Hence,
we examine the methods of forecasting demand.
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LOG203 COURSE GUIDE
Study Unit 5 – Methods for Independent Demand I
This study unit looks at the information that comes from planned operations. Stocks
are needed to support operations, so the details of planned operations must be
known so that the required stocks can be determined. We examine Material
Requirements Planning (MRP), which is a form of dependent demand. Dependent
demand methods link the demands for components to the production plans of final
products. Then stocks can be controlled by actual demand as materials are ‘pulled’
through a supply chain rather than the traditional approach of ‘pushing’ them.
Study Unit 6 – Methods for Independent Demand II
This study unit examines the principles of just-in-time (JIT) and how JIT operations
can be achieved. We examine the kanban system as a way of ‘pulling’ rather than
‘pushing’ materials through the process. We discuss about recent emerging trends in
the area of inventory management. Different inventory tracking techniques and 3D
printing or on-demand manufacturing technology are explored.
3. Learning Outcomes
Knowledge & Understanding (Theory Component)
By the end of this course, you should be able to:
?
Explain the importance of stocks in the supply chain and within an
organisation.
?
Solve the inventory problem when demand is independent, variables are
fixed and known in advance.
?
Analyse the inventory problem when demand is independent, variables are
not known exactly, but follow known probability distributions.
?
Describe the importance of information in inventory management.
• Examine the methods for forecasting demand in inventory management.
• Outline how resource plans are designed at different levels and how they
affect stock.
3
LOG203 COURSE GUIDE
• Apply material requirements planning (MRP) to schedule orders and
operations.
• Implement the just-in-time (JIT) method to manage inventory and production.
Key Skills (Practical Component)
By the end of this course, you should be able to:
?
Relate the strategies and techniques in inventory management to the work
environment.
?
Develop the essential knowledge and interpersonal skills to work effectively
in a team.
?
Demonstrate written proficiency.
4
LOG203 COURSE GUIDE
4. Learning Material
The following is a list of the required learning materials to complete this course.
Required Textbook(s)
Author(s)
Title
Year
Publisher
Inventory Control
2003
John Wiley & Sons
Last name, First name
Waters, D.
and Management,
2nd Edition
5. Assessment Overview
The overall assessment weighting for this course is as follows:
Evening Classes
Assessment
Assignment 1
Description
Weight Allocation
Pre-Course Quiz 01
2%
Pre-Class Quiz 02
2%
Pre-Class Quiz 03
2%
Assignment 2
Group-Based Assignment
38%
Class Participation
Participation during seminars
6%
Examination
Closed-book Written Examination
50%
TOTAL
100%
5
LOG203 COURSE GUIDE
Day Classes
Assessment
Assignment 1
Description
Weight Allocation
Pre-Course Quiz 01
2%
Pre-Course Quiz 02
2%
Pre-Course Quiz 03
2%
Assignment 2
Group-Based Assignment
38%
Class Participation
Participation during seminars
6%
Examination
Closed-book Written Examination
50%
TOTAL
100%
The following section provides important information regarding Assessments. These
assessments will test the ability of students (either individually or in a team) to:
• understand fundamental concepts and principles
• think critically and apply the relevant knowledge/skills/techniques to analyse
and solve real world problems
•
communicate solutions to problems effectively. Continuous Assessment:
There will be continuous assessment in the form of quizzes and one group-based
assignment. In total, this continuous assessment will constitute 50 percent of overall
student assessment for this course. The continuous assignments are compulsory and
are non-substitutable. It is imperative that you read through your Assignment
quest…
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