1.) Caroline, the owner of Caroline's Boutique, Ltd., estimates that she will sell$20,000.00 worth of a certain decorator table this year. Her accountants havedetermined that ordering costs amount to $50.00 per year and that carrying costsamount to 25% of average inventory while the price of each unit is $500.00. Findthe following:a) Optimal number of Orders per year, No;b) Optimal number of Days' supply per order, Nasc) Optimal number of Dollars per order, Ns;d) Optimal number of Units per order, Nu.

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Answered: 1.) Caroline, the owner of Caroline's…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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The store wants to determine the Economic Order Size (EOQ) and Total Inventory Cost for this brand of carpet given an estimated annual demand of 10,000 yards of carpet, an annual carrying cost of P 37.50 per yard, and an ordering cost of P 7,500.00. The store would also like to know the number of orders that will be made annually and the time between orders (i.e., the order cycle), given that the store is open every day except 52 Sundays, Philippine Independence Day, New Year, and Christmas Day (which are assumed to fall not on Sundays) A. Using the computed optimal order size or EOQ, determine the optimum Total Cost. C. Determine the Order Cycle Time
SOLVE THE NEWSPERSON PROBLEM. PROBABILITY 0.24 0.08 0.21 0.16 0.08 0.23 VALUE 1 2 3 4 5 6 PURCASE COST C = 12 SELLING PRICE P = 28 SALVAGE VALUE V = 4 What is the optimal order quantity?
A bey Kuru villa, of Parkside Plumbing, uses I ,200 ofa certain spare part that costs $25 for each order, with an annualholding cost of $24.a) Calculate the total cost for order sizes of25, 40, 50, 60, and 100.b) Identify the economic order quantity and consider the implicationsfor making an error in calculating economic orderquantity.
Explain the following: All things being equal, theproduction order quantity will be larger than the economic order quantity.
Emery Pharmaceutical uses an unstable chemicalcompound that must be kept in an environment where both temperatureand humidity can be controlled. Emery uses 800 poundsper month of the chemical, estimates the holding cost to be 50%of the purchase price (because of spoilage), and estimates ordercosts to be $50 per order. The cost schedules of two suppliers areas follows: a) What is the economic order quantity for each supplier?b) What quantity should be ordered, and which supplier should be used?c) What is the total cost for the most economic order size?d) What factor(s) should be considered besides total cost?
Solve the newsperson problem. Probability 0.11 0.08 0.22 0.26 0.12 0.21 Value 1 2 3 4 5 6 Purchase cost c = 27 Selling price p = 35 Salvage value v = 15 What is the optimal order quantity?
A communication company is manufacturing mobile phones. Their annual demand is 5,000 mobile sets. They want to determine EOQ for a motherboard which has an annual holding cost (H) of $5/unit, and an ordering cost (S) of $60. They also want to calculate total cost (TC) and the reorder point (R) if the purchasing lead time is 4 days, assuming there are 300 working days per year. Find out: a. Economic Order quantity (EOQ) b. Total cost (TC) c. Reorder point (R)
1.An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. Theannual demand is approximately 1,400 batteries. The supplier pays $32 for each batteryandestimates that the annual holding cost is 30 percent of the battery's value. It costs approximately$25 to place an order (managerial and clerical costs). The supplier currently orders 140batteriesper month. Determinetheordering, holding, andtotal inventory costs forthe currentorderquantity. Determine the economic order quantity (EOQ). How many orders will be placed per year using the EOQ? Determine the ordering, holding, and total inventory costs for the EOQ. Howhas ordering cost changed? Holding cost? Total inventory cost?
A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1,000, $5 each; 1,000 to 3,999, $4.95 each; 4,000 to 5,999,$4.90 each; and 6,000 or more, $4.85 each. Ordering costs are $50, annual carrying costs per unitare 40 percent of purchase cost, and annual usage is 4,900 pulleys. Determine an order quantitythat will minimize total cost.
Consider that you work at Kroger Grocery store, and that you've been tasked with creating an ABC inventory classification for 6 items. The 6 items, as well as their profit per case and number of cases sold per week, are as follows:Ribeye Steak - $135 in profit per case, 3 cases sold per weekLobster Tail - $245 in profit per case, 3 cases sold per weekPasta - $23 in profit per case, 12 cases sold per weekSalt - $3 in profit per case, 2 cases sold per weekNapkins - $12 in profit per case, 2 cases sold per weekTomato Sauce - $23 in profit per case, 11 cases sold per weekUsing total weekly profits, please classify each products into A, B, or C categories. Which items form the boundary of the class A and B items in your classification, and why? Which items form the boundary of the class B and C items in your classification, and why?
The president of Value Filters became very enthusiastic about using EOQs to plan the sizes of her production runs, and instituted lot sizing based on EOQ values before she could properly estimate costs. For one particular filter line, which had an annual demand of 1,800 units per year and which was valued at $2.40 per unit, she assumed a holding cost based on a 30 percent annual interest rate and a setup cost of $100. Some time later, after the cost accounting department had time to perform an analysis, it found that the appropriate value of the interest rate was closer to 20 percent and the setup cost was about $40. What was the additional average annual cost of holding and setup incurred from the use of the wrong costs?
Problem 1: Auto Mart is a mythical seller of a variety of automobileparts and accessories. Auto Mart's owner, Jonathan Trott, wishes to determine the optimum order quantity for oneof the store's popular wiper blades. The annual demandfor the wiper blades is 16,000. The annual holding costper unit is US$2.50, and the cost to place an order is US$50:a What is the EOQ?b What are the total annual ordering and holding costs(inUS dollars)?

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