Toyplus Inc. case study

1. Economic order quantities calculations:



In this case study, I use POQ to calculate Optimal Quantities to Order because some the parts are made by company’s plastic-molding machines in an assembly operations and units can be assumed that are received incrementally during production. We also have the following assumptions:



- Only one item is involved because each type of toy has its own assembly line, only one toy can be assembled at a time on this line.

- Annual Demand is known

- Usage rate is constant

- Usage occurs continually but production occurs periodically

- The production rate is constant ( i.e. production rate of Toy Auto is 3500, Toy Truck, 1750; Toy Robot, 2333)

- There are no quantity discounts



Thus, we have to find out the Set up cost, Holding cost, Demand per year, Demand per week and production rate.



Therefore, we have



Ø Set up Cost:



Accordin...