Reference no: EM131936610

Assignment -

Background - Jack and Jill are two UVic Business Alumni who graduated in 2006. They established BestNewTech Inc in 2007 in BC to provide high-tech products to the new tech-savvy customer base in BC (e.g., smartphones, drones, cameras and computers). The company established retail stores in different cities as shown in appendix 1.

BestNewTech Inc. orders its products and accessories from international wholesaler established in Toronto. On average, each time the company places an order, it disburses about $1,250 (which includes overhead, paperwork, fees, and inspection). The average acquisition cost of each item (product) is $550, which includes the delivery to any location in BC. The annual holding cost is 15% of the material cost. The supplier requires about five business days to deliver any order of any size. The company keeps inventories at different locations. The space available is shown in appendix 1.

The average sale price of items sold in each store is $730. In a recent management review, the company was found lacking sound operations management practices. In particular, the company is experiencing difficulties managing demand uncertainties; many stores reported either stock- outs or sometimes high levels of inventories at the wrong locations. The historical sale data is reported in appendix 2.

PART 1: DEMAND PLANNING

1. Examine the sales data and develop 2018 monthly forecasts for each city (suggestion: perform a detailed descriptive analysis, choose the most appropriate forecasting method, and provide forecasting accuracy).

a. Suggestion: apply the main forecasting principles

2. Discuss different strategies to improve demand planning and profitability of the firm. In particular, how would you manage capacity (e.g., HR resources) to meet demand fluctuations?

PART 2: ECONOMIES OF SCALE

3. Suggest an ordering policy to minimize the total cost (inventories and ordering costs).

4. What are the inventory turnover and reordering point(s) based on the suggested policy?

5. Consider a service level of 99%, determine the safety stock in each location.

6. Based on your learning and experience, what other procurement strategies would you consider?

PART 3: STATISCAL QUALITY CONTROL

In different surveys, customers have reported their feedback about the quality of service received at different stores. The analysis of the average service time from 30 samples (sample size = 10) at one particular store is shown in the following control charts:

1. Are these chart appropriate to control service time? Why?

2. What can you say about this store?

3. Please provide a brief description of a possible solution based on your learning and experience to improve service quality.

Attachment:- Assignment File.rar