Martin-Pullin Bicycle Corporation Essay

Martin-Pullin cycle Corp. (MPBC), located in D tout ensembleas, is a wholesale allocator of bicycles and bicycle parts. Formed in 1981 by cousins acti nonherapy Martin and Jim Pullin, the cockeyeds primary sell outlets be located within a 400-mile radius of the dispersion center. These retail outlets receive the enounce from Martin-Pullin within deuce days after notifying the distribution center, provided that the stock is available. However, if an launch is not fulfilled by the company, no back modulate is displace the retailers arrange to get their shipment from other distributors, and MPBC loses that get along of business. The company distributes a wide variety of bicycles. The or so popular model, and the major source of revenue to the company, is the AirWing. MPBC receives all the models from a single manufacturer everywhereseas, and shipment takes as long as four weeks from the term an order is placed. With the cost of communication, paperwork, and customs clearanc e included, MPBC estimates that each time an order is placed, it incurs a cost of $65. The purchase scathe paid by MPBC, per bicycle, is roughly 60% of the suggested retail price for all the styles available, and the broth carrying cost is I % per month (12% per grade) of the purchase price paid by MPBC. The retail price (paid by the customers) for the AirWing is $170 per bicycle. MPBC is interested in making an inventory invent for 2011. The firm wants to maintain a 95% service take aim with its customers to minimize the losses on the lost orders. The selective information collected for the past two years argon summarized in the fol scurvying table (Table 1). A medical prognosis for AirWing model sales in the upcoming year 2011 has been developed and will be used to come across an inventory plan for MPBC.Figure 1. QM output for accustomed data.To keep the tote up costs as low as possible, the optimal order quantity should be maintained. This means an average inventory of 34.14. The Annual apparatus cost and Annual Holding cost would two be $417,89. As a result, the fall yearly inventory cost is $835.78 (2 x 417.89).Discuss ROPs and total costsTo determine the Reorder Point (ROP), the beg and the demand standard conflict must be known. The demand is persistent by dividing the total of the 2011 envision by the number of months and the standard deviation is determined using Microsoft Excel.Figure 2. QM output for ROPAs a result of the sum of the Demand standard deviation and the safety stock, the ROP is 76.89 which the inventory position at which an order should be placed. The total costs can be found in Figure 1. Annual inventory holding cost plus annual setup cost plus purchase cost gives the total cost of $45613.79.How can you address demand that is not at the level of the homework horizon agree to the sample date, the determined demand shows there is not a so called level demand over the planning horizon. Therefore, the EOQ for an entire y ear should not be used due to seasonal sales. A planning horizon to use might be a quarterly planned horizon because this would be much evenly distributed and help make a plan for each segment.ReferenceRender, B., Stair, R. M., & Hanna, M. E. (2012). Quantitative analysis for concern (11th edition). Pearson/Prentice Hall.