Assuming that motorola follows a continuous review policy

Assignment Help Project Management
Reference no: EM1381143

Motorola obtains cell phones from its contract manufacturer located in China to serve U.S. market. The U.S. is served from a warehouse located in Memphis, Tennessee. Daily Demand at the Memphis warehouse is normally distributed with a mean of 5,000 and a standard deviation of 4,000.The warehouse aims for a CSL of 99 percent. The company is debating whether to use sea or air transportation from china. Sea transportation results lead time of 36 days and costs $0.50 per phone. The air transportation results in a lead time of 4 days and costs $1.50 per phone. Each phone costs $100 and Motorola uses a holding cost of 20 percent. Given the minimum lot sizes, Motorola would order 100,000 phones at a time (on average, once every 20 days) if using sea transport and 5,000 phones at a time (on average, daily) if using air transport. To begin with, assume that Motorola takes ownership of the inventory on delivery.

a) Assuming that Motorola follows a continuous review policy, what reorder point and safety inventory should the warehouse aim for when using sea or air transportation?

b) How many of safety and cycle inventory will Motorola carry under each policy?

c) Under a continuous review policy, do you recommend sea or air transportation if Motorola does not own the inventory while it is in transit? Does your answer change if Motorola has ownership of inventory while it is in-transit?

d) suppose, its possible to get rid of variablility in the lead-time as the deliveries are made via sea transportation. what is the most motorola would be willing to pay for this, ie the deliveries would be guaranteed to arrive within 36 days?

Reference no: EM1381143

Discussion on a project management topic

Describe one project manager that you have worked or have interacted with at work or in your personal life, (it can be a wedding,an event planner, or anyone else that assume

What is the density of t

The birth and death probabilities are A= 0.15 and 11 = .05 per animal per year. A hunter wishes to visit the island when he can be 95% sure that the herd has doubled in size

Different stages of the product life cycle

How are products managed during the different stages of the product life cycle?- What is a brand? What are the characteristics of a good brand name? How do firms protect their

Develop a work break dawn structure

Develop a work break dawn structure (WBS). Prepare a list of the specific activities that need to be preformed to accomplish the project objectives. For each a

What is the role of a project manager and program manager

What is the role of a project manager and program manager? What are the skills, knowledge, and abilities required to be project manager? Name five critical success factors a

Articulate own thoughts on the concept of quality

Articulate your own thoughts on the concept of "quality", the Baldrige principles, organizational issues, personal and organzational learning and other important features di

How costs are distributed over the life span of the project

How much will the project cost? What is the most expensive activity - what does the cash flow statement tell you about how costs are distributed over the life span of the proj

Process to determine and manage project budgets

Discuss the processes involved in determining and managing project budgets while explaining what points and pitfalls project managers should keep in mind when performing the


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd