Question

A sporting goods store sells

100

pool tables per year. It costs

$50

to store one pool table for a year. To reorder, there is a fixed cost of

$25

per shipment plus

$18

for each pool table. How many times per year should the store order pool tables, and in what lot size, in order to minimize inventory costs?

Answer #1

(ECP)A sporting goods store sells 100 pool tables per year. It
costs $20 to store one pool table for a year. To reorder, there is
a fixed cost of $40 per shipment plus $16 for each pool table. How
many times per year should the store order pool tables, and in what
lot size, in order to minimize inventory costs?

A bookstore expects to sell 400 calculus textbooks during the
next year. It costs $4 to store one calculus textbook for one
year. To reorder, there is a fixed cost of $12.50, plus $0.50 for
each calculus textbook ordered. In what lot size and how many times
per year should an order be placed to minimize inventory costs?

A jewelry store expects to sell 120 diamond bracelets during the
next year. It costs $2.25 to store one diamond bracelet for one
year. There is a fixed cost of $15 for each order. Find the lot
size and the number of orders per year that will minimize inventory
costs.

A copy
store uses an average of 30 boxes of copier paper per day. The
store
operates 260 days a year. The storage and handling costs for the
paper are
$25 a year per box and it cost approximately $50 to order and
receive a
shipment of paper.
a
. What order size would minimize the sum of annual ordering and
carrying
costs?
b
. Compute the total annual cost using your order size from part
a.
c. Except for...

A business orders sunglasses with a
happy smiles on the arms and sells them for $50 each. During a
typical month, 900 sunglasses are sold. It costs $25 to place an
order and 25 percent to carry sunglasses in inventory for a year.
(15 points)
a.
How many sunglasses should the bookstore order at one time
(i.e., lot size, EOQ)?
b.
The supplier would like to deliver sunglasses once a week. How does
this compare to the preferred lot size...

Jones Company makes and sells 1,000 tables a year for $350 per
table. Manufacturing costs per table are direct material cost of
$138 and direct labor cost of $52. Two hours of direct labor are
required to manufacture a table. Manufacturing overhead (all fixed)
is applied based on labor hours at a rate of $36 per hour. What is
the margin of safety in units?

Staples sells 500 HP printers every week (assume 52 weeks per
year). Each printer costs $100 and Staples has a holding cost of 20
percent. The fixed cost for each order Staples places with HP is
$800. Find the EOQ, total annual cost, reorder point, number of
orders per year, and the time between orders.

The soft goods department of a large department store sells 175
units per month of a certain large bath towel. The unit cost of a
towel to the store is $2.50 and the cost of placing an order has
been estimated to be $12.00. The store uses an inventory carrying
charge of I = 27% per year. Determine:
If, through automation of the purchasing process, the ordering cost
can be cut to $4.00, what will be
(3 points) (d) the...

Tablework Inc. produces tables which it sells for $200
each. The company's only variable costs are materials
and labor and its only fixed cost is factory rent. For
the upcoming year, Tablework has signed a contract with its
suppliers and materials costs will be $26 per leg. The company's
combined state and federal tax rate is 50%.
Note: It takes one labor hour to produce each
table.
Rate/hour
Labor
cost: $100
Total
Amount
Factory
Rent $220,000
How many tables will the company need to sell...

The soft goods department of a large department store sells 175
units per month of a certain large bath towel. The unit cost of a
towel to the store is $2.50 and the cost of placing an order has
been estimated to be $12.00. The store uses an inventory carrying
charge of I = 27% per year. Determine:
(3 points) (a) the optimal order quantity,
(1 points) (b) the order frequency,
(1 points) (c) the annual holding and setup cost.

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