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Dot Com Inventory Management Analysis

The document calculates the optimal order quantity, order frequency, interval between orders, demand during lead time, reorder point, and inventory position for a company called Dot Com. It determines that the optimal order quantity is 400 units, there should be 80 orders per year with an interval of 3.75 days between orders, demand during lead time is 533.33 units, the reorder point is 533.33 units, and the inventory position after an order is placed is 933.33 units.

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Humphrey Osaigbe
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98 views3 pages

Dot Com Inventory Management Analysis

The document calculates the optimal order quantity, order frequency, interval between orders, demand during lead time, reorder point, and inventory position for a company called Dot Com. It determines that the optimal order quantity is 400 units, there should be 80 orders per year with an interval of 3.75 days between orders, demand during lead time is 533.33 units, the reorder point is 533.33 units, and the inventory position after an order is placed is 933.33 units.

Uploaded by

Humphrey Osaigbe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Dot Com

D= 32,000
H= 4
S= 10
Wd = 300
L= 5

a What is Dot Com’s optimal order quantity?


√(2𝐷𝑆/𝐻)

√((2 (32,000) 10)/4)

= 400

b What is the optimal number of orders per year?


𝐷/Q
=

=32,000/400

= 80

c What is the optimal interval (in working days) between orders?


( 𝑁𝑜. 𝑜𝑓 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐷𝑎𝑦𝑠 )/(𝑁𝑜. 𝑜𝑓 𝑂𝑟𝑑𝑒𝑟 𝑃𝑒𝑟 𝑌𝑒𝑎𝑟)
=

= 300/80

= 3.75 days per order

d What is demand during the lead time?


= dL
=32,000/300
5 𝑑𝑎𝑦𝑠
= 533.33

e What is the reorder point?


= dL + Safety Stock
32,000/300
= + 0

= 533.33

f What is the inventory position immediately after an order has been placed?
IP = OH + SR - BO
= IP = OH + SR - BO
= 533.33 + 400 + 0
= 933.33

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