MGT5PSC Procurement And Supply Chain Management - Assessment 2

Assessment 2: Individual Analytical Report

3. FastGood’s marketing team in Malaysia recently received information revealing that some of the existing customers’ demand is being shifted to FastGood’s competitors. This resulted in high inventory levels in East Malaysia’s DCs for Detergent. To overcome the issue, Mrs. Banerjee has decided to apply the EOQ inventory policy in East Malaysia’s DCs for Detergent. Historical data (see the provided dataset) shows a monthly Detergent demand of 70,000 cases in East Malaysia. What is the Economic Order Quantity of Detergent for East Malaysia’s DCs? Discuss how ordering and inventory costs are affected if the DCs set an order amount less or more than the EOQ (+/- 15% of EOQ).

(~1000 words)

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