Established fixed quantity inventory system

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Reference no: EM133962005

Question

(a) The LEGO Group has established a fixed quantity inventory system for its storesin Singapore.

As the manager, you have the following information:
Average monthly demand: 355
Lead time = 45 days
Ordering cost = $87 per order
Unit price = $9
Carrying/holding rate = 25%
Standard deviation of monthly demand = 70.
Assume 30 days per month.
Service level = 99% (z = 3.085)

Calculate the economic order quantity and the reorder point (considering that only demand for some length of time is known).

In your opinion, is this fixed quantity inventory system the most suitable for LEGOs stores in Singapore? Why or why not?

(b) LEGO was founded in 1934 and is now one of the most well-known brands in the world. Indicate two (2) types of technologies that LEGO has adopted or can adopt in manufacturing their products to improve the overall process. You should include realistic examples to justify your answer.

Reference no: EM133962005

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