13.Esmeralda Company's annual material requirement used in a production is 144,000 units. This material costs P200 per unit from a supplier and it requires 5 days lead time from date of order to date of delivery. The ordering cost is P150 per order and the carrying costs is 5% of inventory investment per unit.Determine the total ordering cost for the year.

13.Esmeralda Company's annual material requirement used in a production is 144,000 units. This material costs P200 per unit from a supplier and it requires 5 days lead time from date of order to date of delivery. The ordering cost is P150 per order and the carrying costs is 5% of inventory investment per unit.Determine the total ordering cost for the year.

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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13.Esmeralda Company's annual material requirement used in a production is 144,000 units. This material costs P200 per unit from a supplier and it requires 5 days lead time from date of order to date of delivery. The ordering cost is P150 per order and the carrying costs is 5% of inventory investment per unit.Determine the total ordering cost for the year. * 14.Refer to No. 13. Assuming a safety stock equal to days requirement, the reorder point is *
21. The expected annual usage of a particular material is 540,000 units, and the standard order size is 36,000 units The invoice cost of each unit is P900, and the ordering cost per order is P240. Assuming the company does not maintain safety stock. What is the ordering cost?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a priceof $8 per stone for quantities of 600 stones or more, $9 per stone for orders of 400 to 599 stones,and $10 per stone for lesser quantities. The jewelry firm operates 200 days per year. Usage rate is25 stones per day, and ordering costs are $48.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize totalannual cost.b. If annual carrying costs are 30 percent of unit cost, what is the optimal order size?c. If lead time is six working days, at what point should the company reorder?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.70 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $10.00 per stone for lesser quantities. The jewelry firm operates 109 days per year. Usage rate is 25 stones per day, and ordering costs are $48. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) b. If annual carrying costs are 29 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Sells 360,000 tennis balls per year. The tennis balls cost Dennis Sport World RM15 per dozen. Annual inventory carrying costs are 20% of inventory price. The cost of placing and receiving an order are RM72. Assuming the inventory replenishment occurs virtually instantaneously. Based on recent experience, Dennis Sport World uses 7 days delivery time for planning purposes. (Assume 360 days in a year) a) Calculation of the Economic Order Quantity? b) Calculation of the number of orders to be placed? c) Calculation of the total annual inventory costs? d) Determination of the reorder point?
Your distribution company has an annual demand of 1,400 lawn mowers. The cost of a lawn mower is $400. Carrying cost is estimated to be 20% of unit cost, and the ordering cost is $25 per order. If you order in quantities of 330 or more, you can get a 5% discount. Do a complete “EOQ with Discount” calculation and determine the optimal order quantity. Please show all calculations.
Ross White’s machine shop uses 2500 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 300 working days per year. A. What is the reorder policy? B. What are the total annual holding and ordering costs associated with your recommended EOQ? C. What is the total annual cost associated with your recommended EOQ?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $9.70 per stone for lesser quantities. The jewelry firm operates 230 days per year. Usage rate is 16 stones per day, and ordering costs are $45.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do…
A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days ayear. Storage and handling costs for the paper are $30 a year per box, and it costs approximately$60 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 rounding, are annual ordering and carrying costs always equal at the EOQ?d. The office manager is currently using an order size of 200 boxes. The partners of the firmexpect the office to be managed “in a cost-efficient manner.” Would you recommend that theoffice manager use the optimal order size instead of 200 boxes? Justify your answer.
A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days ayear. Storage and handling costs for the paper are $30 a year per box, and it costs approximately$60 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 rounding, are annual ordering and carrying costs always equal at the EOQ?d. The office manager is currently using an order size of 200 boxes. The partners of the firmexpect the office to be managed “in a cost-efficient manner.” Would you recommend that theoffice manager use the optimal order size instead of 200 boxes? Justify your answer.
The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?
Q 1 Super K Beverage Company distributes a soft drink that has a constant annual demand rate of 4,600 cases. A 12-pack case of the soft drink costs Super K $2.25. Ordering costs are $20 per order, and inventory-holding costs are charged at 25 percent of the cost per unit. There are 250 working days per year, and the lead time is four days. Find the economic order quantity and total annual cost, and compute the reorder point. Q 2 Environmental considerations, material losses, and waste disposal can be included in the EOQ model to improve inventory management decisions. Assume that the annual demand for an industrial chemical is 1,200 lb, item cost is $5/lb, order cost is $40, inventory-holding cost rate (percent of item cost) is 18 percent. Q3 An insurance claims work area has five claims waiting for processing as follows. Job Processing Time Due Date (Di) 1 22 35 2…