Illustration of the two main types of errors resulting from use of the economic order quantity (eoq) as a tool in production scheduling designed to permit class discussion to begin with a consideration of one common type of mistake, errors in calculation of the eoq volume resulting from use of incorrect data for the input parameters of the formula. Read, analyze and be prepared to discuss the blanchard company case using the following study guide questions: determine which costs should be included to perform the eoq/rop calculations what are the assumptions of the eoq/rop model that blanchard has briefly describe the inventory system designed by bob and elliot. View homework help - blanchard case from mba 101 at iim bangalore q1 correct the economic order quantity (eoq) and reorder point (rop) quantities for each of the five items mentioned in the.
Correct the economic order quantity (eoq) and reorder point (rop) quantities for each of the five items mentioned in the case tax and customs duty considerations it was the practice at blanchard to delay pontificia universidad católica de chile. If blanchard did produce what they had originally planned, they would have a lot of unused inventory what are the disadvantages of the formal eoq/rop system and the actual system used for scheduling bottling runs at blanchard. Blanchard importing and distributing co the eoq and rop values were recalculated based on the 1972 estimated return on investment of 20% for the wine merchandising versus the 9% originally used in 1969.
There are also several disadvantages for the actual system blanchard uses while they may have plenty of safety stock, their surplus of inventory is unnecessary they base their forecast off of the bottler’s guesses, rather than historical data. Blanchard importing essay 948 words | 4 pages group case assignment v blanchard importing and distributing co, inc read the course pack item “blanchard importing and distributing co, inc” and answer the following questions: 1 correct the eoq and rop quantities for each of the five items mentioned in the case. Hence blanchard importing & distributing co all one size items are produced in one go rather than changing the sizes and hence a sufficient quantity of other sizes need to be at hand in order to reduce the stock out situations.
Blanchard importing and distributing co the eoq and rop values were recalculated based on the 1972 estimated return on investment of 20% for the wine merchandising versus the 9% originally used in 1969 the calculations were also made for both the 1971 year end demand numbers and the 1972 1st quarter demand numbers. Before making corrections to the eoq and rop figures for each of the 158 items bottled by blanchard, hank located the documents showing how the formal scheduling system was developed in 1969 these records, which are reproduced in exhibit 2, indicate the general method used to determine eoq and rop quantities for each blanchard product.
Blanchard imports 9-673-033 blanchard importing and distribution co, inc hbsp 12pp teaching note availableannotation - illustration of the two main types of errors resulting from use of the economic order quantity (eoq) as a tool in productionscheduling. Blanchard importing and distributing co, inc 1825 words | 8 pages blanchard importing and distributing co, inc question 1: eoq/rop calculations multi period inventory system: fixed-order quantity model (eoq/rop) assumptions: demand for products is constant, however safety stock added as precaution to stock outs.
Cost coefficients 21 1969 system this is an eoq model with certain assumptions about the cost components leading to incorrect calculation of cost coefficients and therefore inaccurate eoq this has been explained in detail in the sections that follow. The economic order quantity model, and also so-called “eoq formula”, is often very helpful in guiding managers about the order quantity decision regarding consequences the eoq model was developed by ford w. The analysis can then shift to a more general discussion of the second type of error, the misapplication of eoq and re-order point (rop) techniques to a given system class discussion can conclude with student recommendations of alternative techniques which may be better suited to the blanchard operation than the eoq/rop method.