Martin-Pullin Bicycle Corporation Essay

Martin-Pullin Bicycle Corp. (MPBC), located in Dallas, is a wholesale electrical distributor of bicycles and bicycle parts. Formed in 1981 by cousins Ray Martin and Jim Pullin, the firms primary retail outlets are located within a 400-mile spoke of the distribution center. These retail outlets receive the golf club from Martin-Pullin within two eld after notifying the distribution center, provided that the stock is available. However, if an order is not fulfilled by the company, no backorder is placed the retailers arrange to get their despatch from other distributors, and MPBC loses that add up of business. The company distributes a wide variety of bicycles. The most popular model, and the major(ip) source of revenue to the company, is the AirWing. MPBC receives all the models from a single manufacturer overseas, and shipment takes as long as four weeks from the time an order is placed. With the price of communication, paperwork, and customs clearance included, MPBC estimate s that each time an order is placed, it incurs a be of $65. The buy price paid by MPBC, per bicycle, is roughly 60% of the suggested retail price for all the styles available, and the inventory carrying cost is I % per month (12% per year) of the purchase price paid by MPBC. The retail price (paid by the customers) for the AirWing is $ clxx per bicycle. MPBC is interested in making an inventory plan for 2011. The firm wants to maintain a 95% service take aim with its customers to minimize the losses on the lost orders. The data collected for the past two years are integralitymarized in the following table (Table 1). A forecast for AirWing model gross sales in the upcoming year 2011 has been developed and will be utilize to make an inventory plan for MPBC.Figure 1. QM output for given data.To carry the fundamental costs as low as possible, the optimal order quantity should be maintained. This means an average inventory of 34.14. The Annual apparatus cost and Annual Holding cost would both be $417,89. As a result, the total annual inventory cost is $835.78 (2 x 417.89). plow ROPs and total costsTo determine the Reorder Point (ROP), the ask and the demand standarddeviation must be known. The demand is indomitable by dividing the total of the 2011 forecast by the number of months and the standard deviation is determined using Microsoft Excel.Figure 2. QM output for ROPAs a result of the sum of the Demand standard deviation and the safety stock, the ROP is 76.89 which the inventory position at which an order should be placed. The total costs can be instal in Figure 1. Annual inventory holding cost rundown annual setup cost plus purchase cost gives the total cost of $45613.79.How can you address demand that is not at the level of the readiness horizon According to the sample date, the determined demand shows thither is not a so called level demand over the planning horizon. Therefore, the EOQ for an entire year should not be used due to seasonal sale s. A planning horizon to use might be a quarterly planned horizon because this would be more evenly distributed and benefactor make a plan for each segment.ReferenceRender, B., Stair, R. M., & Hanna, M. E. (2012). Quantitative depth psychology for management (11th edition). Pearson/Prentice Hall.