Question
1. A supermarket stocks Hostess Cakes. The demand for these cakes is 6,000 boxes per year...
1. A supermarket stocks Hostess Cakes. The demand for these cakes is 6,000 boxes per year (365 days). It costs the store $100 per order, and $0.75 per box per year to keep the cakes in stock. Lead time is 4 days. Determine the following: a) The EOQ. b) The average inventory c) The optimal number of orders per year. d) The annual cost of ordering and holding inventory.
Homework Answers
Answer #1
Annual demand (D) = 6000
Ordering cost (O) = $100
Holding cost (H) = $0.75 per box per year
Lead time = 4 days
Ans a)
Economic order quantity = 
= 
= 1265 boxes per order
Ans b)
Average inventory = 0.5 * 1265
= 632.5 boxes
Ans c)
Optimal number of orders per year = 
= 
= 4.74 i.e 5 orders per year
Ans d)
Annual ordering cost = 
= 
= $474.30
Annual holding cost = 
= 
= $474.37
Not the answer you're looking for?
Similar Questions
1. A hardware store sells paint that has a demand of 10,568 gallons per year. 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...
The office manager for the Gotham Life Insurance Company orders letterhead stationery from an office products...
The office manager for the Gotham Life Insurance Company orders
letterhead stationery from an office products firm in boxes of 500
sheets. The company uses 6,500 boxes per year. Annual carrying
costs are $3 per box, and ordering costs are $28. The following
discount price schedule is provided by the office supply company:
Order Quantity (in boxes) Price per Box 200-999 $16 1000-2999 14
3000-5999 13 6000+ 12 a. Determine the optimal order quantity and
the total annual inventory cost....
A copy store uses an average of 30 boxes of copier paper per day. The store...
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...
Ross White’s machine shop uses 2,500 brackets during the course of a year, and this usage...
Ross White’s machine shop uses 2,500 brackets during the course
of a year, and this usage is relatively constant throughout the
year. These brackets are purchased from a supplier 100 miles away
for $15 each, and the lead time is 2 days. The holding cost per
bracket per year is $1.50 (or 10% of the unit cost) and the
ordering cost per order is $18.75. There are 250 working days per
year.
(a) What is the EOQ?
(b) Given the...
The Queens Box Company experiences a constant demand of 48,000 boxes per year to operate its...
The Queens Box Company experiences a constant demand of 48,000
boxes per year to operate its business. The unit cost is .30
(cents). Placing an order costs $20 and annual carrying costs are
$2/unit. The company operates 250 days per year and maintains a
safety stock of 576 boxes. The lead time for an order of boxes is 4
business days. The EOQ (rounded to the nearest whole number)
is:
a.
576 units
C.
3098 units
b.
490 units
d....
a company decides to establish an EOQ for an item. The annual demand is 200,000 units....
a company decides to establish an EOQ for an item. The annual
demand is 200,000 units. The ordering costs are $40 per order, and
inventory-carrying costs are $2 per unit per year. Calculate the
following: A. The EOQ in units. B. Number of orders per year. C.
Annual ordering cost, annual holding cost, and annual total
cost.
Suppose Stanley's Office Supply purchases 90,000 boxes of pens every year. Ordering costs are $133.95 per...
Suppose Stanley's Office Supply purchases 90,000 boxes of pens
every year. Ordering costs are $133.95 per order and carrying costs
are $0.75 per box. Moreover, management has determined that the EOQ
is 5,669.92 boxes. Note: The ordering costs and EOQ differ from
problem 1. The vendor now offers a quantity discount of $0.02 per
box if the company buys pens in order sizes of 10,000 boxes.
Determine the before-tax benefit or loss of accepting the quantity
discount. (Assume the carrying...
Electronic computer services use paper at the rate of 1500 boxes per month. It cost $75...
Electronic computer services use paper at the rate of 1500 boxes
per month. It cost $75 to place an order and holding cost for paper
is 3.75 per Box per year, Lead time 7 days. The company operates
300 days per year.
a) computer the optimal order quantity for Electronic computer
services.
b) how many orders will electronic place per year with this
order quantity.
c) find out the reorder point.
Antonio White’s machine shop uses 3,500 brackets during the course of a year. These brackets are...
Antonio White’s machine shop uses 3,500 brackets during the
course of a year. These brackets are purchased from a supplier 80
miles away. The following information is known about the
brackets:
Annual demand:
3,500
Holding cost per bracket per year:
$1.45
Order cost per order:
$15.50
Lead time:
2 days
Working days per year
260
Given the above information, what would be the economic order
quantity (EOQ)?
Given the EOQ, what would be the average inventory? What would
be the...
The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet....
The I-75 Carpet Discount Store has an annual demand of 10,000
yards of Super Shag carpet. The annual carrying cost for a yard of
this carpet is $0.75, and the ordering cost is $150. The carpet
manufacturer normally charges the store $8 per yard for the carpet;
however, the manufacturer has offered a discount price of $6.50 per
yard if the store will order 5,000 yards. How much should the store
order, and what will be the total annual inventory...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 8 minutes ago
asked 8 minutes ago
asked 11 minutes ago
asked 23 minutes ago
asked 49 minutes ago
asked 52 minutes ago
asked 53 minutes ago
asked 53 minutes ago
asked 54 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago