Please answer and explain the calculation of problem 11. range dog biscuits every year. The fixed ordering cost is$2. What is the economic order quantity for the biscuits?$15, and the cost of holding a bag in inventory for a year is10. (**) Now suppose the supplier of workbenches guaranteesand service level information in problem 9. Is the reorderwith no variability (i.e., standard deviation of lead time= 0). Recalculate the reorder point, using the demandKraftyCity that the lead time will be a constant 3 weeks,g Inventory throughout the Supply Chaine at www.e Excel toctions orpoint higher or lower? Explain why.(11) Ollah's Organic Pet Shop sells about 4,000 bags of 6anualment.n or-(12.)(**) Suppose Ollah decides to order 200 bags at a timWhat would the total ordering and holding costs for theyear be? (For this problem, don't consider safety stockwhen calculating holding costs.)in13.) (**) Average weekly demand for free-range dog biscuits is 80bags per week, with a standard deviation of 16 bags. Ollahuses a continuous inventory review system to manage inven-tory of the biscuits. Ollah wants to set the reorder point highenough that there is only a 5% chance of running out beforethe next order comes in. Assuming that the lead time is aconstant 2 weeks, what should the reorder

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Description: Please answer and explain the calculation of problem 11. range dog biscuits every year. The fixed ordering cost is$2. What is the economic order quantity for the biscuits?$15, and the cost of holding a bag in inventory for a year is10. (**) Now suppo

EOQ or economic order quantity is the amount of quantity a business should order so that it could…

Business

Operations Management

(11.)(*) Ollah’s Organic Pet Shop sells about 4,000 bags of free- range dog biscuits every year. The fixed ordering cost is $15. and the cost of holding a bag in inventory for a vear $2. What is the economic order quantity for the biscuits?

(11.)(*) Ollah’s Organic Pet Shop sells about 4,000 bags of free- range dog biscuits every year. The fixed ordering cost is $15. and the cost of holding a bag in inventory for a vear $2. What is the economic order quantity for the biscuits?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Your firm uses a continuous review system and operates 52 weeks per year. One of the Stock-Keeping Units (SKUs) has the following characteristics:Demand = 20000 units/year = 385 units/weekOrdering cost = $40/orderHolding cost = $2/unit/yearService level = 95 percentz=1.65Lead time = 2 weeksDemand is normally distributed, with a standard deviation of weekly demand of 100 units. a)Calculate the item's EOQ. b)Find the safety stock and reorder point that provide a 95 percent service level. c)For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders?
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3,800 cases. A case of the soft drink costs R&B $3. Ordering costs are $20 per order and holding costs are 25% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy. a. economic order quantity (round your answer to the nearest integer.) _____450_______ b. reorder point ______76______ c. cycle time (in days) (round your answer to two decimal places.) ______29.61______ d. total annual cost (in $) (round your answer to two decimal places.) _____?_______ ***I am asking the question with the ? symbol. I have been able to locate the numbers for the first three but I am having issues computing my answers for the last one.
Design your own inventory management problem with the required input data and answer the following questions : a. What is the optimal order size? b. What is the optimal number of orders per year? What is the optimal number of days between orders? d. What is the annual inventory cost? e. If the lead time were X days/weeks/months, what would be the reorder point? f. For what value of ordering cost would Y units of order size be optimal?
A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 20 cans per day. Inventory holding costs are $0.50 per can per year. Ordering costs are $10 per order. The lead time is two weeks. Backorders are not practical— the motorist drives away.a. Based on these data, choose the appropriate inventory model and calculate the economic order quantity and reorder point. Describe in a sentence how the plan would work. Hint: Assume demand is deterministic.b. The boss is concerned about this model because the demand really varies. The standarddeviation of demand was determined from a data sample to be 6.15 cans per day. Themanager wants a 99.5 percent service probability. Determine a new inventory planbased on this information and the data in part (a). Use Qopt from part (a).
Banana Inc. a Company that markets skin care products . The annual demond is 2400 units and ordering cost is 10 per order . The holding cost per year is 0.30 .Amount of the working days of the is 250 days in a year , Lead time of the order is 2 days . a. What is the optimal order size? b. What is the optimal number of orders per year? c. What is the optimal number of days between orders? d. What is the annual inventory cost? e. If the lead time were 2 days, what would be the reorder point? f. For what value of ordering cost would 1000 units of order size be optimal? g. Determine how often the firm should order. h. Determine the size of each order ı. At what price should the firm order?
The demand for a commodity is 40,000 units a year, at a steady rate. It costs $20 to place an order, and $0.40 to hold a unit for a year. Find the order size to minimize inventory costs, the number of orders placed each year, the length of the inventory cycle and the total costs of holding inventory for the year. What is the EOQ? What is the number of orders placed each year? What is the inventory cycle (length of time that the the order size will last)? in terms of weeks What is the total ordering & carrying costs at the EOQ level?
The EOQ model with quantity discounts attempts todetermine:a) the lowest amount of inventory necessary to satisfy acertain service level.b) the lowest purchase price.c) whether to use a fixed-quantity or fixed-period orderpolicy.d) how many units should be ordered.e) the shortest lead time
The maintenance department of a large hospital uses about 816 cases of liquid cleanser annually. Ordering costs are $12, carrying costs are $4 per case a year, and the new price schedule indicates that orders of less than 50 cases will cost $20 per case, 50 to 79 cases will cost $18 per case, 80 to 99 cases will cost $17 per case, and larger orders will cost S16 per case. Determine the optimal order quantity and the total cost Show your result on diagram with order quantity on X axis and cost on Y axis.
An organization manufactures supplies for landscaping companies which has an annual demand of 16,000. The cost of storing each unit is $2.5/year and $50 to make an order. Say the company has 300 days of annually, answer the following questions: a. What is the optimal order quantity? b. How many orders in a year? c. How many days between orders? d. How much is the total inventory cost?
In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEMNUMBER Annual Usage Item Number 1 $ 2,100 11 $ 14,000 2 13,000 12 1,100 3 2,800 13 44,000 4 52,300 14 10,800 5 10,500 15 1,800 6 1,300 16 11,100 7 2,600 17 4,700 8 11,900 18 63,700 9 5,800 19 4,100 10 16,100 20 3,500 a. Classify each item in inventory using an ABC plan.
Edwarldo’s Manufacturing uses 2,400 units of a product per year on a continuous basis. The product Carrying Cost are $60 per year and Ordering Cost are $250. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory. Show Computations and Explanations. A. Calculate the Economic Order Quantity (round up the answer to the nearest whole unit) (Format: 111) B. Calculate the Total Cost per year to order and carry this item. (Format: 1,111) C. Their supplier has notified the company that if they increase their order quantity by 58 units, they will give the company a discount. Calculate the Dollar Discount that the company will have to at least give to Edwarldo’s Manufacturing to be indifferent. (Format: 111)
Henry Crouch’s law office has traditionallyordered ink refills 60 units at a time. The firm estimates thatcarrying cost is 40% of the $10 unit cost and that annualdemand is about 240 units per year. The assumptions of thebasic EOQ model are thought to apply.a) For what value of ordering cost would its action be optimal?b) If the true ordering cost turns out to be much greater thanyour answer to (a), what is the impact on the firm’s ordering policy?