Therefore, the sales estimating equation is:
By applying this estimating curve, we can find the sales of A and B items. For example, 20 percent of the items, or 0.220 = 4items, will be A items with a cumulative proportion of sales of:
and 3,000,0000.5765 = 1,729,412. The A+B item proportion will be:
and 3,000,0000.8448 = 2,534,400. The product group B sales willbe A+B sales less A sales, or 2,534,400 1,729,412 = $804,988. The product group C will be the remaining sales, but these are not of particular interest in this problem. The average inventories forA and B products are found by dividing the estimated sales by the turnover ratio. That is,
The total cubic footage required for this inventory would be 353,1551.5 = 529,732 cu. ft. The totalsquare footage for products A and B is divided by the stacking height. That is, 529,731/16 = 33,108 sq. ft.”
D.R. Universidad Virtual del Tecnológico de Monterrey.
Capítulo 4, de acuerdocon Ballou (2004): “6 (a) This company is fortunate to be able to estimate the sales level that can be achieved at various levels of distribution service. Because of this, the company should seek tomaximize the difference between sales and costs. These differences are summarized as follows:
The company should strive to make deliveries within one day, 80 percent of the time, for a maximumcontribution to profit. (b) If a competing company sets its delivery time so that more than 80 percent of the orders are delivered in one day and all other factors that attract customers are the same, thecompany will lose customers to its competitor, as the sales curve will have shifted downward. Cleanco should adjust its service level once again to the point where the profit contribution is...