Jays Corporation

Jays Corporation
Question
Answered

The following are some of the questions that you need to address:

1. Using the data in case Exhibit 4 and the 2012 annual demand, calculate the EOQ and ROP quantities for the five SKUs scheduled to be produced in the last week of June.  How do these amounts compare with those calculated in 2011?  Compare the increases in EOQs with the increases in annual demand.

2. Brodie is uncertain if the costs presented in case Exhibit 2 are appropriate for determining the EOQs.  What changes would you recommend, and why?  Should the cost of the three idle part-time workers be included when the production line is down?  Using the 2012 annual demand, and your recommendations, recalculate the EOQs for the five SKUS.

3. Compare your results with those obtained using the data in case Exhibit 2.  What do you attribute the differences to?  After speaking to Jake and Josh, Brodie is now not sure if the EOQ model is the most appropriate for the current production process.  Evaluate the scheduling method that Jake and Josh are using.  Why are they not following the established system?

4. Compare the established EOQ/ROP procedure (described in case Exhibit 2) with the one that Jake and Josh are using.  Which system do you prefer?  What improvements do you recommend?

5. What recommendations should Brodie present to Jana Fremont at his next meeting with her?