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The company Åkab sells the bicycle cart Åk-lett. The cart is manufactured in Colombia and transported from there by ship to Gothenburg (20 days) and then sent by car to the warehouse in Västerås (1 day). Total transport time is 21 days. The company orders the products every 14 days, from the order placed in Colombia to the carts being loaded on the ship, it takes 5 days. A fixed cost (regardless of order size) of SEK 2,000 is paid for the transport. According to the forecast made by the company, the expected demand per month is 167.8 carts and has a MAD value of 32.1

a) Calculate the order-up-to-level required to reach 98% service level (k = 2.06)

b) Describe how to decide how much to order when placing an order

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c) Calculate the average amount of capital tied up in this supply chain, the value of the product is SEK 2,400

 
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