Question

15. A store has an ordering cost of $250, a carrying cost of
$4 per unit, annual product demand of 6,000 units, and it purchases
product from a supplier for $500 per unit, however, the supplier
has offered the store a discount price of $400 if it will purchase
1,200 units; the store’s minimum total inventory

cost is

a. $2,407,300

b. $3,607,200

c. $3,464,000

d. $2,987,400

16. If a store has annual demand (365 days per year) of 6,000
units and the lead time for it to receive

an order from its supplier is 20 days, its EOQ reorder point
is approximately

a. 300 units

b. 329 units

c. 428 units

d. 600 units

17. If a store has annual average daily demand of 16 units
with a standard deviation of 2 units, and the lead time for it to
receive an order from its supplier is 20 days, the store’s safety
stock for a 95%

service level is approximately

a. 14.8 units

b. 10.4 units

c. 17.5 units

d. 26.1 units

18. If a store has annual average daily demand of 16 units
with a standard deviation of 2 units, and the lead time for it to
receive an order from its supplier is 20 days, the store’s reorder
point for a 95%

service level is approximately

e. 326.1 units

f. 334.8 units

g. 348.2 units

h. 356.6 units

Answer #1

16. EOQ Reorder point = ((annual demand)/(total days per year))*Lead time to receive order from supplier

= (6000/365)*20

=16.44*20

=329

17) Safety stock = safety factor * standard deviation of demand * sqrt (Lead time)

Safety factor for 95% service level = 1.64

Safety stock = 1.64*2*sqrt(20) = 1.64*2*4.48 = 14.8 units

18) Re-order point = (Lead time * Avergae demand) + Safety stock

= (Lead time * Avergae demand) + (safety factor * standard deviation of demand * sqrt (Lead time))

Safety factor for 95% service level = 1.64

Safety stock = 1.64*2*sqrt(20) = 1.64*2*4.48 = 14.8 units

(Lead time * Avergae demand) = 20 days * 16 units = 320

Re-order point = 320 + 14.8 = 334.8 units

15)Total min.invenroty cost = 2407300 $

12. If a company has an ordering cost of $250, a carrying cost
of $4 per unit, annual product demand of
6,000 units, and its production rate is 100 units per day, the
optimal order quantity is approximately
a. 866
b. 756
c. 945
d. 1,027
13. If a company has an ordering cost of $250, a carrying cost
of $4 per unit, annual product demand of 6,000 units, and its
production rate is 100 units per day, the total...

MNO has an average annual demand for red, medium polo shirts of
100,000 units. The cost of placing an order is $500 and the cost of
carrying one unit in inventory for one year is $20.
Required:
a. Use the economic-order-quantity model to determine the
optimal order size.
b. Determine the reorder point assuming a lead time of 12 days
and the store is open 250 days in the year.
c. Determine the safety stock required to prevent stockouts
assuming...

16) For supply item ABC, Andrews Company has been ordering 125
units based on the recommendation of the salesperson who calls on
the company monthly. A new purchasing agent has been hired by the
company who wants to start using the economic-order-quantity method
and its supporting decision elements. She has gathered the
following information:
Annual demand in units
250
Days used per year
250
Lead time, in days
10
Ordering costs
$100
Annual unit carrying costs
$20
Required:
Determine the...

1. A hardware store sells paint that has a demand of 10,568
gallons per year. The store purchases the paint from a supplier for
15.0 dollars per gallon The unit holding cost per year is 19
percent of the unit purchase cost. while the ordering cost is 134
dollars per order. The paint supplier has a lead time of 8 days.
What is the annual holding cost if the store uses the order
quantity of 1,147 gallons per order? Assume...

Southeastern Bell stocks a certain switch connector at its
central warehouse for supplying field service offices. The yearly
demand for these connectors is 16,000 units. Southeastern estimates
its annual holding cost for this item to be $25 per unit. The cost
to place and process an order from the supplier is $70. The company
operates 300 days per year, and the lead time to receive an order
from the supplier is 2 working days.
a. Find the economic order quantity....

Assume the following:
Fixed Ordering Cost: $100
Unit product cost to obtain: $2.00
Sell Price: $5.00
Annual holding cost: 30%
Daily Demands: 50 units
Daily demand variance: 4 units
Leadtime: 4 weeks
Service level: 99%
What is the optimal reorder point, R? What is
the optimal order quantity?

1.
For product M, a firm has an annual holding cost that is
25% of the item cost, an ordering cost of $10 per order, and annual
demand of 1560 units. If ordering at least 85 units, the price per
unit is $16; if ordering at least 95 units, the price per unit is
$14.5. Lead time is 5 days. The firm operates 260
days.
a) Determine
the most cost-effective ordering quantity
b) What is the
total cost for the...

Bed Bath & Microwaves has problems with its best-selling
microwave—the SonicMicrowave. Hank, the owner, tells you that he
always seems to have too many or too few of the SonicMicrowave. He
has hired you to help determine how much and when to order. At the
same time, the company is considering quotes from 2 different
suppliers, and you will help compare suppliers. You estimated the
following information from the detailed records that Hank kept on
the microwave. You calculated the...

Hotel Singapura uses plastic litter bags for housekeeping. The
hotel places orders for
these bags only when the inventory is below the reorder level. The
hotel operates for 52
weeks a year, 7 days per week. The bags come in a pack of 12 and
costs $10.75 each.
The following information is available about these bags.
Demand = 95 packs/week
Order cost = $58/order
Annual holding cost = 25% of cost
Required service level = 90%
Lead time = 4...

A local discount store stocks toy race cars. Recently, the store
has received the following discount schedule for these
cars. The annual demand for race case is 5000 cars, the
ordering costs are $49 per order and the annual carrying costs are
20% percent of the unit price.
a.) Indicate the order quantity, price and total cost that will
minimize total inventory costs.
Quantity
Price
1-699 $5.00
700-1999 $4.80
2000
+ $4.75
b.) Assume that the discount store
would like to have a...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 8 minutes ago

asked 17 minutes ago

asked 19 minutes ago

asked 21 minutes ago

asked 28 minutes ago

asked 44 minutes ago

asked 47 minutes ago

asked 49 minutes ago

asked 49 minutes ago

asked 53 minutes ago

asked 1 hour ago