Buy Research Project Case Study

Buy Research Project Case Study
 Total costs include average inventory carrying costs, inventory order processing costs and transportation costs;
 Average cycle stock equals 1/2 of EOQ plus safety stock; and  The number of order cycles equals annual demand in cases divided by the EOQ.
1. What is the total annual logistics cost of inventory and transportation associated with the current practice of shipping product by railroad freezer cars to Trenton, NJ and then by commercial trucks to retail outlets? Safety stocks under this scenario are 550 cases. Base your calculations on expected 2023 sales. Show your calculations. (6 points)
2. What would the total annual logistics cost be if the company uses the private fleet option? Safety stocks under this scenario are reduced to 279 cases. Show your calculations. (6 points)
Buy Research Project Case Study
3. What would the total annual logistics cost be if the company uses the option of shipping product by air to the retail outlets? You will need to estimate safety stocks for this scenario. To keep it simple, use the safety stock numbers for the above questions to estimate your number based on lead time, since we do not have standard deviation figures for sales. Show your calculations. (6 points)
4. The above scenarios all use the EOQ model to calculate their costs. Would you consider this the most appropriate inventory model to use, and if not, what alternative would you suggest, and why? If you conclude that the EOQ model is the best, explain why as well. (6 points)
5. What other advice would you provide to The Happy Ham executives that could further improve their supply chain? This advice could include risk reduction, cost reduction, service improvement or any other advice that could improve their operations and supply chain. (6 points)
In all questions requiring calculations, show your work. A final answer with no calculations is not enough to get full credit for the question.
3
Questions 1, 2

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