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Alpha Corp. (a) is a company producing lawn mower. Beta Corp. (B) is a company producing motor for the lawn mower. Recently ß is in negotiation with a for the supply of motor for the year 2023. After the negotiation, ß realise that there is a great need for it to forecast a's future demand for the year 2023. Therefore, ß 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). Table 1: a's quarterly demand for the years 2019 - 2022 (in thousands) Quarter 1 Year Quarter 2 Quarter 3 2019 2020 2021 2022 *Random number between 400 to 600 from excel SECTION A (20 marks) Q1) Fill up the table with random numbers between 400 to 600 by using Microsoft Excel. * * Quarter 4 * * * Note: Take a snapshot of your excel file and attached with answer as a proof. Q2) Calculate a's forecasted demand for four quarters of 2023 using trend regression line and seasonal variation factors through moving average technique.
Q3) a is planning a budget to purchase the motors from ß in 2023. Currently a is purchasing the motors quarterly. But, now they have decided to apply EOQ model instead of purchasing quarterly. Assume that a is now experiencing regular demand from the customer, the ordering cost is RM50 per order, the unit cost is RM320 per motor, and annual holding cost are 20% of the unit cost. a also has 250 working days per year and a lead time of 5 days. Based on the result from Q2) identify the following aspects of the inventory policy for the motors: a) Economic order quantity (EOQ) b) Reorder point c) Cycle time d) Total annual inventory cost e) If a want to choose between quarterly and EOQ, which purchasing practice would you recommend to it. Justify your selection.
Q4) On the other hand, ß 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 in 2023. Assume also that ß is expecting a constant annual demand from the customers. ß 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. ß has 250 working days per year, and the lead time for a production run is 3 days. Based on the result from Q2) 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