roblem L Answer the olwing There is two type of irecascing

roblem L. Answer the olwing ) There is two type of irecascing methouts D b) Independent demands means e) Naive Approach is o In the inventory systom, stockout means that e) In the inventory system, Economic Order Quantity means What is the difference between fived-order-quantity and fixed-time-period inventory control systenm Problem 2. Demand for Quiggly Pops follows an up and down pattern over the four quarters of a year, with peaks in the spring and winter months when special promotions are held. Production is handled by a highly skilled local workforce during a regular 40-hour week (i.e, overtime and subcontracting are not used). The company likes to zero out its inventory at the end of year so that it can start fresh each January. QP currently uses a level production strategy but would like to evaluate other ptions. Create a production plan and calculate the cost of the plan for each strategy listed below. Which plan would you commend to QP? Level production Chase demand

Solution

Q1)

a) The two types of forecasting methods include - 1. Qualitative methods, 2. Quantitative methods

b) Independent demand is the demand for a finished product which is unrelated to the demand for other items.

c) Naive Approach is a forecasting technique in which the last period\'s actual sales becomes the forecast for the current period.

d) In the inventory system.stockout means uavailability of the products to fulfill the current demand which results in lower service levels

e) In the inventory system, Economic Order Quantity means the quantity which needs to be ordered in one order to minimize the total costs which include holding cost, purchase cost, ordering costs etc.

f) In fixed order quantity system, same quantity is ordered everytime the order is placed whereas in fixed time period inventory system, different quantities of product are ordered at equal time intervals.

Q2) Chase demand strategy is recommended for the firm as it is seasonal demand and the inventory has to be zero at the end of the year. For calculations, production plan details need to be provided.