Inventory and Operations Management

Section A (500 words) 1) Appraise the overall operations of the company; particularly comment on its shop floor operations and manufacturing planning and control systems. [10 marks] (500 words only)

Section B (1500 words) 4) Quantify the value of the current inventory and the cost of holding the stock per year for the consumables, assuming an annual holding rate of 27% and that the 10 weeks of stock policy is correctly implemented. [5 (correct formula)+5(correct calculation) = 10 marks] 5)

Segment the consumable inventory based on the value-usage criteria. Present and discuss the results including a graphical representation of Pareto principle. Explain what other segmentation criteria might be used. [5(correct formula of value-usage)+5(correct representation and ABC application +5(listing 5 segmentation criteria) = 15 marks] 6) For a consumable inventory, calculate the total annual cost and re-order point (ROP) for each order. For total annual cost calculate by two models that is average and EOQ. Define and show formulas for all the parameters you are using for calculation with the assumption that demand is constant. Give justification as which model i.e. either average or EoQ is better and why? [2.5 (correct formulas for average and EoQ models)+2.5(correct calculation of average and EoQ models)+5 (justification as why to use average or EoQ)+2.5(correct formula of ROP)+2.5(correct calculation of ROP) = 15 marks]