PROBLEMS TO SOLVE

This activity is part of your first evaluations.

Please attach an Excel file, with your name and the results of the exercise as indicated:

1. New Wave Shelving’s inventory manager would like to start using an ABC inventory classification
system. The following table shows the annual inventory usage of all the 19 component items
that the company holds. Assign them to their appropriate category.

2. An autoparts sale is analyzing its inventory policy for alternators model XD1. It has determined
that such product has a demand of 18 units per week, and its purchase value is 60 $/unit. The
ordering cost is aprox. 45 $/order. The weekly holding cost is around 10% of the value of the
item , and the bussiness operates 52 weeks in a year. The supplier’s lead time is 2 weeks.

a) What is the economic order size?

b) What is the time between orders?

c) What is the total cost associated with this inventory policy?