H&M’s chief demand planner has estimated that 9,250,000 units of clothing will be sold in 2021. H&M’s cost of placing and processing an order is R250, while the annual cost of holding a unit in its distribution centre is projected at 5% of the unit purchase price. Both costs are expected to be constant for the foreseeable future. On average H&M sells a unit of clothing for R300.00 at cost plus 50%. Orders are received two weeks after being placed with the supplier. Assume a 365-day year and that demand is constant throughout the year. Furthermore, as part of the drive towards operational efficiency, the chief demand planner is thinking about using the seasonally-adjusted moving average method to forecast demand for H&M’s clothing for the 2021 financial year. In this regard, Mrs Masuku has retrieved from the retailer’s database the following information on number of clothing sold over a four–year period. Year Quarterly sales (‘000 units) Q1 Q2 Q3 Q4 2016 1300 1500 1200 2000 2017 1600 1800 1100 2200 2018 1700 1900 1300 2300 2019 1800 2100 1400 2500 3.1 Study the information provided above and answer the following questions: Calculate the economic order quantity (EOQ). (3 marks) 3.2 Using a simple regression analysis, determine the trend equation of the sales and use it to estimate the number of units of clothing sold throughout the fiscal year 2020. Assume that Q1 of 2016 is 1, Q2 of 2016 is 2, etc. Show all relevant calculation details.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
H&M’s chief demand planner has estimated that 9,250,000 units of clothing will be sold in 2021. H&M’s
cost of placing and processing an order is R250, while the annual cost of holding a unit in its distribution
centre is projected at 5% of the unit purchase price. Both costs are expected to be constant for the
foreseeable future. On average H&M sells a unit of clothing for R300.00 at cost plus 50%. Orders are
received two weeks after being placed with the supplier. Assume a 365-day year and that demand is
constant throughout the year.
Furthermore, as part of the drive towards operational efficiency, the chief demand planner is thinking
about using the seasonally-adjusted moving average method to
for the 2021 financial year. In this regard, Mrs Masuku has retrieved from the retailer’s database the
following information on number of clothing sold over a four–year period.
Year Quarterly sales (‘000 units)
Q1 Q2 Q3 Q4
2016 1300 1500 1200 2000
2017 1600 1800 1100 2200
2018 1700 1900 1300 2300
2019 1800 2100 1400 2500
3.1 Study the information provided above and answer the following questions:
Calculate the economic order quantity (EOQ). (3 marks)
3.2 Using a simple regression analysis, determine the trend equation of the sales and use it to
estimate the number of units of clothing sold throughout the fiscal year 2020. Assume that
Q1 of 2016 is 1, Q2 of 2016 is 2, etc. Show all relevant calculation details.
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