Question

Ever since the introduction of the first home theater systems for television, Fadi Faddoul has dreamed about manufacturing his own Home Theater system for professionals. During the early years of home theater, Fadi watched a lot of his favorite old movies on his home theater and planned the eventual development of his own Home Theater system. He intended it to be used primarily by television stations, advertising agencies, and other individuals and groups that wanted the best in Home Theater systems. The overall configuration of this system is shown in the illustration. The basic system includes a comprehensive control box, two separate DVD player systems, a DVD disk, and a professional-quality television set. All these devices are fully integrated. In addition, the basic system comes with an elaborate remote control device. This device can operate both Home Theater systems, the DVD disk, and the TV system with ease. The remote control device works by sending infrared signals to the control box, which in turn controls the other devices in the system.
Fadi's unique contribution to the Home Theater systems is the control box. The control box is an advanced microprocessor with the ability to coordinate the use and function of the other devices attached to it.
Fadi's professional Home Theater system has numerous advantages over similar systems. To begin with, special effects can be introduced easily. Images from the DVD disk, one of the Home Theater systems, and the television system can easily be placed on the other Home Theater system. In addition, it is possible to connect the control box to several popular microcomputers including the Macintosh, the IBM PC, the Radio Shack Model 3000, and advanced Zenith and Coleco computer systems. This makes it possible to develop attractive graphics on the microcomputer and to transfer them directly to the Home Theater system. It is also possible to hook a stereo system to the control box to integrate the highest quality stereo sound into the system and record it on one of the Home Theater systems. The two Home Theater systems also offer remarkable flexibility in editing. Several special editing buttons were placed on the remote control station. It is possible to first record a program on one Home Theater system and then edit it by using the other DVD player system to add and delete sections. One of the best features of Fadi's professional Home Theater system is the price. The basic system, including the control box, both Home Theater systems, the DVD disk, and the television system, has a retail price of $1,995.
Fadi found manufacturers for the television system, the control box, and the DVD disk system in the United States. Because DVD player systems are more popular, Fadi had more choices. After extensive research, he was able to eliminate all of the potential suppliers but two. Both of these suppliers are Japanese companies. Toshida is a new company located outside of Tokyo, Japan. Like other suppliers, Toshida offers quantity discounts. For quantities ranging from 0 to 7,000 units, Toshida would charge Fadi a price of $250 per Home Theater system. For quantities that ranged between 7,000 and 8,000 units, the per unit cost would be $230. For quantities ranging from 8,000 to 20,000 units, the unit price drops to $220. For more than 20,000 units, the per unit price of the Home Theater systems would be only $210. The other Japanese supplier is Nony. Although Nony originally started in Japan, also outside of Tokyo, it now has offices and manufacturing facilities around the world. One of these manufacturing facilities is located less than 100 miles north of Atlanta, Georgia. Like Toshida, Nony offers quantity discounts for its DVD player systems. For quantities ranging from 0 to 1,000, Nony's per unit cost is $230. For quantities that range from 1,000 to 5,000 units, the unit cost is $240; and for over 5,000 units, the unit cost drops to $220.
Because Nony has manufacturing facilities located in the United States, the cost to place an order and the delivery time are much more favorable than they are with Toshida. The estimated per order cost from Nony is $40, and the expected delivery time is two weeks. On the other hand, the ordering cost is higher and delivery time is longer for Toshida. The additional paperwork and problems associated with ordering directly from Japan would increase Fadi's cost to $90 per order. Furthermore, the delivery time for Toshida is three months. Fadi estimates that his carrying cost would be 30 percent. This is due primarily to storage and handling cost as well as the potential for technological obsolescence. For the first year or so of operations, Fadi decided to sell only the basic unit: the control box, the television set, the DVD disk, and the two DVD player systems. The demand for the complete system was fairly constant during the past six months. For example, June sales were 7,970; July sales were 8,070; August sales were 7,950; and September sales were 8,010. This demand pattern is expected to continue for the next several months.
1. What are the reorder points for Nony and Toshida?

2. If you were Fadi, which company would you choose to supply the DVD player systems for your professional Home Theater system?

3. Fadi is considering several alternative strategies. The first would be to sell all of the components separately. The second strategy would be to modify the control box to allow other DVD player systems to be used as well as the DVD player systems supplied by Fadi. In general, what impact would the adoption of these strategies have on the reorder point and inventory control for Fadi?

Answer 1

The essential framework incorporates a far reaching control box, two separate DVD player frameworks, a DVD plate, an expert quality TV. These are completely incorporated and it accompanies a preferred position of remote control framework, this gadget can work the two theaters frameworks and DVD plate and TV frameworks effectively. The remote works by sending infrared sign to the control box, which thus controls different gadgets in the framework.

Fadi's one of a kind commitment to the home theater framework is the control box. It is commonly a propelled microchip with the capacity to arrange the utilization and capacity of different gadgets joined to it.

Fadi expert home theater framework has various favorable circumstances over comparable frameworks. It is very amicable to associate the control box to a few well known microcomputers including the Macintosh, the IBM PC, the radio shack model 3000, and propelled Zenith and coleco PC frameworks.

This makes it conceivable to create alluring designs on the microcomputer and to exchange them straightforwardly to the home theater framework and it likewise supports to snare sound systems to the control box to coordinate the most noteworthy quality stereo sound into the framework and record it on one of the home theater frameworks. The two home performance center frameworks offers striking adaptability in altering, a few exceptional altering catches were put on the remote control station.

The Best component of Fadi's expert home theater framework is the cost. The essential framework including the control box both home theater framework and the DVD circle and the Television framework have the retail cost of $1,995.1. Nony has producing offices in the United States, so the expense to put in a request and the conveyance time are significantly more favourable.The evaluated per request cost is $40 and the estimated conveyance time is two weeks.

Nony offers great limits for its DVD player frameworks.

Recorder focuses for Toshida:

The requesting cost is higher and conveyance time around 3 months.

The additional administrative work makes challenges and evidently the expense per request would increment up to $90.

It is another organization so it can't offer any kind of limits and hazard range is high.

2. On the off chance that I am Fadi, I might want go with Nony, as it has a larger number of points of interest than disadvantage's.

pros:

Generally safe

High benefits

Conveyance cost is moderate

Conveyance date is just two weeks

It has workplaces in United States

It offers great limits

cons:

Rapid numerous issues

Difficulties of selling the item

As Nony has great scope of plausibility of achievement, I will support to push forward and pick this for providing DVD player framework for the expert home theater framework

3. The beneath are the recorder focuses for the appropriation of these procedures have on the stock control:

Benefits will be moderate

It gives explicit time for dissecting the DVD player frameworks which I by and large not required on a day by day note.

Isolating segments won't satisfy the prerequisite to finish on schedule.

Control box is now remarkable in its own and no progressions or procedures required for it.