Throxxy Cleopatra

Kevin Dorko, Connor Fuller, Alex Ortiz, Evan

Friedenberg, Tony Bracrella
Overview
Forecast Method

EOQ

ROP

Transportation Costs

2013 Performance
Previous Demand
Forecast Method
Double Exponential Smoothing w/ Seasonality.
Allows for predicting multiple periods ahead and
includes seasonality.

Quarter (2014) Demand
Q1 6,109
Q2 13,039
Q3 6,569
Q4 12,481
Total 38,200
MAD 2647
MAPE 41%
MSE 14499517
Bias 8444
EOQ

We chose an EOQ of 3,500 to take advantage of the volume
discount.
By doing this you will save about $85,000, compared to your
current ordering strategy based on expected demand in
2014.








Order Quantity Cost per unit Total cost
773 $25.00 $964,773
2500 $23.75 $923,621
3,500 $22.50 $880,275
Reorder Point
Based on a CSL of 96%, the optimal ROP would be at
2,252 units.

Previous ROP was 1000.

Increasing the CSL caused an increase in ROP,
allowing you to become more responsive to consumers.


Transportation Costs



In order to reduce transportation costs, you should
switch from using half truck and half intermodal carriers
to using only intermodal carriers.
By implementing this change, transportation costs
would reduce by 46%.
Mode Intermodal Truck
Holding Cost $23,926 $18,238
Transport Cost $42,975 $163,305
Total Cost $66,901 $181,543
Conclusion
With current decisions, you can expect
$519,206 in profits.
By implementing our decisions regarding
EOQ, ROP, and transportation, we expect a
profit of $980,349 for the next fiscal year.