Running head: PROBLEM SOLUTION: KUIPER LEDA INC.
Problem Solution: Kuiper Leda Inc.
University of Phoenix Dallas
May 23, 2006
MBA - 550
Problem Solution: Kuiper Leda Inc.
In this paper we recall and further develop an inventory model formulated by one student of MBA 550. One will make some generalizations of the theorems of Chase, Jacobs and Aquilano with application to a reliability type inventory problem. The basic assumption made in connection with this reproduction is that the delivery of the ordered amount takes place in an interval, according to some arbitrary process, rather than at one time period. The setback is to determine that minimum level of safety stock, which ensures continuous production, without interruption, by a prescribed high possibility. The model is further developed first by its combination with another inventory control model, the order up to S model and then, by the formulations of a fixed and a dynamic type stochastic programming models; hence we have Kuiper Leda Inc.
Situation Background (Step 1)
Kuiper Leda, further referred to as, K.L. is an electronic component manufacturer that specializes in the production of electronic control units (ECUs) and sensors for the automotive industry. As the vice president of supply chain one has to take a look at the current situation and to develop an inventory management plan for handling the extra requirements placed on this company by its customers. Currently, they are producing 1250 ECUs and 250 radio frequency identification devices (RFID) per day. Hypothetically speaking, if there is no work done on the weekends, leaving 250 workable days per year, K.L. would have produced 312,500 ECUs and 62,500 RFIDs in one year.
K. ...