Quantitative Applications Essay Example | Topics and Well Written Essays - 2000 words

Quantitative Applications - Essay Example(c) A bemuse plan was constructed and the network was designed for designing, writing and installing a bespoke computer database. The critical course of action and the shortest time to completion is identified as follows= Contract negotiation User discussions Review current constitution Systems analysis (a) Systems analysis (b) Programming Preliminary testing Documentation preparation Implementation Debugging Manual.(d) This project tummy be controlled by monitoring and controlling the critical activities and reducing lead time on the some other activities which do not contribute towards the critical path. The important activities that need monitoring and control may be the Systems analysis, programming, testing, documentation, implementation and debugging.(a) The main advantages of holding an strain be that losses due to unexpected changes in pick up and deliveries from suppliers can be avoided and it is a safety net against backorde rs. The main disadvantages of holding inventory are the change magnitude holding courts incurred due to higher rental value of the space occupied, higher premiums, the danger of the inventory losing its value or becoming obsolete and the loss of money in opportunity costs.The assumptions made are that the demand lay out is known and it is uniform (constant), the ordering cost is constant, quantity discounts do not exist, the employment rate is infinite (with no shortages) and the order is received immediately after placing the order. The formula for a simplistic demand model for the EOQ (Economic Order Quantity) is now given belowEconomic Order Quantity, Q = Where, C = bushel cost per order (not per unit, in addition to unit cost)D = annual demand quantity of the merchandiseH = annual holding cost per unit (also known as carrying cost)(c) Unit cost = 80Annual holding cost per unit = 20% per year = 0.20 * 80 = 16Holding cost per unit per month = 1.33Fixed cost per order = 140D emand = 700 /monthTherefore, EOQ, Q = 384 units/order(d) If the supplier offers a 5% discount on the product cost if ordered in cuds of 1200 units or more, then the advice to the manager is to place the orders once every four months.QUESTION 3(a) A draw of a simple and basic EBQ model is shown below (production and consumption model).The assumption here is that rather than the lot arriving instantaneously, the lot is assumed to arrive continuously at a production rate K. This situation arises when a production process feeds the inventory and the process operates at the rate K greater than the demand rate D. According to this model, the Economic Batch Quantity (EBQ), or the Economic take Quantity (EPQ) is given by Where, K = Setup costD = Demand rateF = holding costP = production rate(b) Unit cost of a thermostat = 25Demand per annum, D = 4000Production Rate, P = 200 per week = 10400 per annumSetup costs, K = 240 /setupInventory Holding costs, F = 17.5% of