Answer Happy

2. A Royal Gold distributor of HP laptop computers want to forecast the year 4 demand by using trend projection (WITH and WITHOUT seasonal effect). Data from the past 3 years, by month is shown in Table 2. DEMAND Seasonal Indexes (SI) MONTH YEAR 1 Jan 80 Feb 70 Mar 80 90 May 113 June 110 100 Aug 88 Apr YEAR 2 85 85 93 95 125 115 102 102 YEAR 3 105 85 82 115 131 120 113 110 0.851 0.904 1.064 1.309 1.223 1.117 1.064 0.957 July Table 2: HP laptop computer demand 3. Based on sales forecasted for the year 4 (with seasonal effect), the company need to buy raw materials (laptop plastic cases) from supplier. Price of plastic case is RM20/pc. Ordering costs are RM 120. For holding cost, the supplier agreed to give 25% discount from the value of the inventory. The company has 250 working days per year, and the lead time is 5 days. Determine the Economic Order Quantity, Reorder point and Total annual cost.