The LEGO Group has established a fixed quantity inventory system for its stores
in Singapore. As the manager, you have the following information:
Average monthly demand: 355
Lead time = 45 days
Ordering cost = $87 per order
Unit price = $9
Carrying/holding rate = 25%
Standard deviation of monthly demand = 70.
Assume 30 days per month.
Service level = 99% (z = 3.085)
Calculate the economic order quantity and the reorder point (considering that
only demand for some length of time is known).
In your opinion, is this fixed quantity inventory system the most suitable for
LEGOs stores in Singapore? Why or why not?
(13 marks)
(b) LEGO was founded in 1934 and is now one of the most well-known brands in
the world. Indicate two (2) types of technologies that LEGO has adopted or can
adopt in manufacturing their products to improve the overall process. You should
include realistic examples to justify your answer.
(12 marks)
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