
BUS FPX 4014 Assessment 5 Inventory and Ordering Decisions
Student Name
Capella University
BUS-FPX4014 Operations Management for Competitive Advantage
Prof. Name
Date
Question #1
Calculate and provide the numeric monthly aggregate production rate rounded to a whole number. The level production rate is the total units per period. The formula for the Aggregate Production Rate (APR) is:
APR=M(D1+D2+D3+D4+D5+D6āSI+EI)ā
Given:
- Six-Month Demand (= 1,535)
- Period 1 (= 240)
- Period 2 (= 225)
- Period 3 (= 265)
- Period 4 (= 270)
- Period 5 (= 260)
- Period 6 (= 275)
Net Requirement (= 1,535 + 50 – 150 = 1,435)
Monthly APR =(240+225+265+270+260+275ā150+50)6=239=6(240+225+265+270+260+
275ā150+50)ā=239 (rounded).
Question #2
What is the equation for the number of workers needed to meet the aggregate production rate?
168ā=48Ā unitsĀ perĀ monthĀ perĀ worker. 4831=1.6Ā unitsĀ aĀ dayĀ perĀ worker.3148ā=1.6Ā unitsĀ aĀ dayĀ perĀ worker. 23131=7.45Ā unitsĀ aĀ day.31231ā=7.45Ā unitsĀ aĀ day. 7.451.6=4.66Ā dailyĀ workers.1.67.45ā=4.66Ā dailyĀ workers. 4.66Ć31=145Ā workersĀ neededĀ toĀ produceĀ 231Ā unitsĀ inĀ oneĀ month.4.66Ć31=145Ā
workersĀ neededĀ toĀ produceĀ 231Ā unitsĀ inĀ oneĀ month.
Question #3
Provide the algebraic equation for the economic order quantity rounded to the closest whole number.
EOQ=(2ĆOCĆUHCAQā) ļæ½ļæ½ļæ½=(2Ć10Ć54002)=54,000EOQ=(2Ć10Ć25400ā)=54,000 54,000=23254,000ā=232
Question #4
Provide the algebraic equation for the reorder point.
RP=DQĆLT ļæ½ļæ½=22Ć5RP=22Ć5 ļæ½ļæ½=110RP=110
Question #5
Describe the below forecasting methods and the math associated with each method, along with the pros and cons of using it.
NaĆÆve
- Estimating technique used as a comparison without adjusting.
- Pro: Easy, quick, benchmarking.
- Con: Accuracy, cannot forecast turning points.
Simple Mean
- An average of all available data.
- Pro: Easy to calculate, easy to use for patterns.
- Con: No actual value, as only averages provided.
Simple Moving Average
- Takes recent actual values and then averages them.
- Pro: Easy to calculate and understand.
- Con: All values are calculated equally.
Weighted Moving Average
- Recent values are given more weight in calculating the forecast.
- Pro: Reflective upon updated data.
- Con: Complex calculations required.
Exponential Smoothing
- Recent data with more weight.
- Pro: More weight within updated data.
- Con: Data includes potentially unnecessary data impacting total forecast.
Linear Trend Line
- Straight line through a set of data through time series.
- Pro: Multiple statistics can be added.
- Con: Too much data with one independent variable.
Ā
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