Question

In: Statistics and Probability

If the ROP is greater than the order quantity, explain how the ROP is implemented. Can...

If the ROP is greater than the order quantity, explain how the ROP is implemented. Can the ROP be more than twice the order quantity, and, if so, how is such a situation handled?

Expert Solution

First we need to understand the ROP calcualtion procedure.

- ROP is nothing but Reorder point.

ROP concept implemented in the inventory mainly for forecasting the high demand , season demand and according to the requirement , maintaining the safety stock.

ROP = Leadtime demand and safety stock

LEadtime demand will ba calculated for identify the lead time and average daily usage.

lead time will be differ , depends on the place we procure the product and we should no what is the average daily usage.

The simple calculation of lead time deman = Lead time + average daily usage

Safety stock = ( MAX daily usage/ Max lead time in daye) - (MIN daily usage/Min lead time in days)

ROP is the mandatory procedure in inentory and calculation should happend every month. I will expain the procedure in step by step:

1. Before start of the ROP calculation first we need to get demand plan monthly growth from demand planner.

2. demand planner forecast the monthly growth and provide the percentage of increase or decrease of the product.

3. ROP Analyser will take past 52 weeks sales quantity and calculate with demand plan monthly growth percentage and get the quantity for the future 52 weeks.

4. Now we need to prepare the ROP summary report with details of current ROP, calculated ROP and Difference.

5. Now S & OP Managers (sales and operation) will cross verify the calculated ROP numbers and approve for place the order for future orders.

6. Each product has there own SOP groups and delivery time metrix. based on this two order will be placed .

now we will come to the scenario of how the situation will be handled if the ROP is greater than the order quantity, explain how the ROP is implemented. Can the ROP be more than twice the order quantity.

ROP is nothing but safety stock.

say for example, Initially sales team will give forecast for next 6 months and update the safety stock.

Yes, It is possible that ROP is more than twice the order quantity.

In this case sales team will reduce the safety stock with more number of sales.

It is not compelsary that as per the forecast sales should sale all the materials. current market situation and customer's plan change will affect the sales.

If ROP is higher than the order quantity then , first sales team will try to reduce the safety stock and next demand planner check current situation and adjust the future demand. so that next order placement will be stop for a while and safety stock will be used for regular order for quite sometime.

if the safety stock turns to normal than again demand planner and S & OP manager analyse the situation and increase the demand

orchestra answered 2 years ago

if the reorder point is greater than the order quantity, explain how the ROP is implemented....

if the reorder point is greater than the order quantity, explain how the ROP is implemented. Can the ROP be more than twice the order quantity? if so, how is such a situation handled?

If the market equilibrium quantity is greater than the socially optimal quantity, one can infer that:...

If the market equilibrium quantity is greater than the socially optimal quantity, one can infer that: Select one: a. the private marginal benefits of the activity are less than the marginal social benefits. b. the production of this good has a positive externality. c. the production of this good has a negative externality. d. the private marginal costs for the activity are greater than the marginal social costs of the activity.

What is the ROP? How is it determined?

Can the sustainable growth rate of a company be greater than the internal growth rate? Explain...

Can the sustainable growth rate of a company be greater than the internal growth rate? Explain why and how.

Prove that if G is a connected graph of order n is greater than or equal...

Prove that if G is a connected graph of order n is greater than or equal to 3, then its square G^(2) is 2-connected

A government-owned monopoly is more likely to: 1. provide a greater quantity of output than a...

A government-owned monopoly is more likely to: 1. provide a greater quantity of output than a private one. 2. provide output at a lower price than a private one. 3. serve public interest than maximize profit. 4. All of these statements are true.

. Explain how cyclical decoration can be implemented at the Boulevard Tower in Muscat Hills. The...

. Explain how cyclical decoration can be implemented at the Boulevard Tower in Muscat Hills. The answer should include a brief description of: i. Cyclical decoration. ii. The relevance of cyclical decoration to the building. iii. The items to be replaced. iv. The procedure to be carried out.

Show that there are no magic squares of order greater than one if we require each...

Show that there are no magic squares of order greater than one if we require each row, column and diagonal to have a constant product.

Can someone explain how the photoelectric effect is implemented when analyzing a sample in the lab?

1) Describe at least two measures that can be implemented in order to minimize the risk...

1) Describe at least two measures that can be implemented in order to minimize the risk of downtime. Be specific and provide detail on how the measure works and specifically what risk it reduces related to system downtime. 2) Discuss the two types of backup methods. Be specific and use examples. 3) What is a disaster recovery plan and how can a company implement such a plan and ensure it will be effective?