Operations Management Homework Help

Sep 14th, 2015
Price: $20 USD

Question description

Inventory Management

Deliverable Length: 700 words in full APA format (see attached), including 1 page of calculations

You know from your prior experience that moving to lean manufacturing (or demand-based manufacturing) can generate not only profitability improvements but also improvements in asset requirements (inventory reduction). Based on this, you wanted to let the Global Supply Chain Manager and her purchasing department know about the kind of inventory savings that might be achievable.

She is already familiar with the classic EOQ formula, of

Q= v2CD / H


C = cost of issuing a new purchase order or cost of a changeover in the manufacturing plant; 

D = demand per period; and 

H = carrying cost of inventory

To assess the expected level of average inventory, the formula is

Average inventory = Q / 2

where Q = EOQ from the EOQ formula.

In a traditional forecast-driven manufacturing operation, assume the following:

  • Monthly sales or demand = 1,000 units
  • Changeover cost = $500
  • Inventory carrying cost = 30% of inventory cost
  • Average cost per unit of inventory = $10

Let the Global Supply Chain Manager and her purchasing department know the following:

  1. In a traditional forecast driven manufacturing operation,
    • What would be the EOQ?
    • What would be the average inventory level in units, and in dollars?
  2. In a demand-based, synchronous manufacturing operation, assume C = $10, with the changeover time reductions seen in synchronous manufacturing.
    • What would be the new EOQ?
    • What would be the new average inventory level in units, and in dollars?
  3. Assuming the carrying cost of inventory is 30%, what is the dollar savings in inventory needed?
  4. What conclusions can you reach about the impact on the company's overall ROI when switching to demand-based, synchronous manufacturing?

Grading Criteria


Deliverable requirements addressed; understanding of material and writer's message and intent are clear.


Scholarly research supports the writer's position and is properly acknowledged, and cited direct quotations may not exceed 10% of the word count of the body of the assignment deliverable (excluding title page, abstract, table of contents, tables, exhibits, appendices, and reference pages). Inclusion of plagiarized content will not be tolerated and may result in adverse academic consequences.


Critical thinking: Position is well-justified, there is logical flow, and there are examples.


Structure: Includes introduction and conclusion, proper paragraph format, and reads as a polished, academic paper or professional presentation, as appropriate for the required assignment deliverable.


Mechanical: No spelling, grammatical, or punctuation errors.


APA: Deliverable is cited properly according to the APA Publication Manual (6th ed.).



Tutor Answer

(Top Tutor) Daniel C.
School: New York University

Studypool has helped 1,244,100 students

Review from our student for this Answer

Sep 18th, 2015
"Totally impressed with results!! :-)"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1823 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors