Answer the questions below:
1. When trying to determine whether to shorten the delivery time of a project, the project manager has to work out the cost of crashing in order to compare it with the cost of overrunning the deadline. If the normal cost is R7 000 and the cost to crash is R10 200, with a maximum of 4 weeks that can be saved, the total cost of crashing would be:
2. A logistics manager has to decide whether to order larger quantities less often or smaller quantities more often. He decides on an order quantity of 2 000 units at a time. His annual demand is for 30 000 units, cost of ordering is R440 per order and his holding costs R60 per unit. Calculate the total cost of holding inventory.
3. A pet food retailer sells 500 000 bags of dog food in week 1, 530 000 in week 2, 480 000 in week 3, 540 000 in week 4 and 512 000 in week 5. Using a 3-period simple moving forecast, estimate what the sales would most likely be in week 6.
4. A mining equipment supplier trades in several products which are clustered into five categories, according to the markets they serve. The demand facing the company may be forecasted either based on individual products or per cluster. Which of the following statements is most sensible regarding the choice of forecasting approach for this company?
5. EOQ is a technique used for managing inventory and supply chain. If the demand for the product is 25 000 litres, the cost of ordering is R200 per order and the holding cost is R50 per unit, what would the economic order quantity be?
6. When basing buying and capacity decisions on forecasting, it is important to track the forecasting errors. If the actual demand for a certain period is 36 units while the demand forecast was 34, what would the squared error be?