Answer Happy

Alpha Corp. (a) is a company producing lawn mower. Beta Corp. (b) is a company producing motor for the lawn mower. Recently b is in negotiation with a for the supply of motor for the year 2023. After the negotiation, b realise that there is a great need for it to forecast a 's future demand for the year 2023. Therefore, b uses a 's quarterly demand over the past four years (2019-2022) to forecast a 's future demand for the year 2023. Table 1 show a's quarterly demand over the past four years (2019-2022). A B D 1 Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 2 465 476 595 3 422 501 540 4 542 5 550 2019 2020 2021 2022 485 517 571 466 581 599 492 528 QUESTION: On the other hand, b is planning to produced it own lawn mower under his company name in 2023. Assume that the result in Q2) is also the forecasted quarterly demand for b in 2023. Assume also that b is expecting a constant annual demand from the customers. b predicted that, its annual production quantity would be 1.5 times the annual demand in 2023. The cost of one lawn mower is RM470. The holding cost is based on an 18% of the unit cost, and production setup costs are RM250 per setup. b has 250 working days per year, and the lead time for a production run is 3 days. Based on the result identify the following aspects of the inventory policy for the lawn mowers: a) Minimum cost production lot size b) Number of production run per year c) Cycle time d) Length of a production run e) Maximum inventory f) Reorder point g) Total annual inventory cost