Please solve complete 2. An electronic component manufacturer produces supercapacitors. They are sold at a steady rateof 60 per week. The capacitors cost the manufacturer $200 each. It costs the distributor $1200to initiate an order, and holding costs are based on an annual interest rate of 30 %.a.Determine:i.the optimal number of capacitors for the distributor to purchase,ii.the time between placement of orders,iii.the yearly holding cost for this item,iv.the yearly setup cost for this item andv.the yearly purchase cost for this item.b. Due to the pandemic, the lead time for order delivery has increased. What standing order sizeshould the distributor set, if the lead time is:i.2 months,i.18 months?c. If production rate is 4000 supercapacitors per year, determine:i.the optimal size of a production run,ii.the length of each production run,iii.the average annual holding cost,iv.the average annual setup cost andV.the maximum level of the on-hand inventory.

The question is related to the Inventory Management. The Optimum order quantity will be calculated…

Answered: 2. An electronic component manufacturer…

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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3) The Omnigroup stocks and sells Kipor generators. The firm gathered the following information from its Kathmandu office: Demand = D = 19,500 units per year Ordering cost = S = $25.60 per order Holding cost = H = $4.40 per unit per year The firm wants to calculate the: a) EOQ for the Kipor generators. b) Annual holding costs for the Kipor generators. c) Annual ordering costs for the Kipor generators. Hint: EOQ = square root of (2DS/H) Annual Holding Cost = (Q/2) H Annual Ordering Cost = (D/Q) S
Hammonds Corporation is trying to decide between two alternate order plans for itsinventory of a certain item. Irrespective of the plan to be followed, demand for the item isexpected to be 1,000 units annually. Under Plan A: order costs would be $ 40 per orderand inventory holding costs (carrying cost) would be $100 per unit per annum. Under PlanB order costs would be $30 per order, while holding costs would be 20% of unit cost whichis $480.Determine:i. the economic order quantity for EACH plan ii. total inventory cost for EACH plan iii. hence, indicate which plan would be better for the company
3. Cynthia Knott’s oyster bar buys fresh Louisiana oysters for $5 per pound and sells them for $12 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $1 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 100 pounds and a standard deviation of 15 pounds. a) What is the cost of underestimating demand for each pound? b) What is the overage cost per pound? c) How many pounds of oyster should she order each day? d) What is the stockout risk for this order size?
We are given the following information for a product:Order cost $50Annual demand N(960, 3,072.49)Annual holding cost $6/item/yearShortage cost $80 per unitLead time one monthSales price $40 per unitProduct cost $30 per unita Determine the order quantity and the reorder pointunder the assumption that all demands are backordered. b Determine the order quantity and reorder point un-der the lost sales assumption.
The Rahway, New Jersey, plant of Metalcase, a manufacturer of office furniture, produces metaldesks at a rate of 200 per month. Each desk requires 40 Phillips head metal screws purchasedfrom a supplier in North Carolina. The screws cost 3 cents each. Fixed delivery charges and costsof receiving and storing shipments of the screws amount to about $100 per shipment, independently of the size of the shipment. The firm uses a 25 percent interest rate to determineholding costs. Metalcase would like to establish a standing order with the supplier and is considering several alternatives. What standing order size should they use?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)d. Which method resulted in the lowest-cost policy for this problem?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)a. What ordering policy is recommended by the Silver–Meal heuristic?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)c. What ordering policy is recommended by the least unit cost heuristic?
In the calculation of an optimal policy for an all-units discount schedule, you firstcompute the EOQ values for each of the three order costs, and you obtain: Q(0) =800, Q(1) =875, and Q(2) =925. The all-units discount schedule has breakpointsat 750 and 900. Based on this information only, can you determine what the optimal order quantity is? Explain your answer.
Quantity discounts. This type of problem can be recognized when a list showing prices for eachquantity range is given along with the basic EOQ information.a. If unit holding cost is constant, use these steps to solve the problem:1. Use Formula 13–2 to find Q.2. Locate Q in the price schedule.3. Compute TC using Formula 13–1 for Q and for all lower-cost price breaks.b. If unit holding cost is a percentage of unit price, use these steps to solve the problem:1. Beginning with the lowest cost, and using the corresponding H for that cost, compute Qusing Formula 13–2. Continue moving up in unit cost until a feasible Q is found.2. Locate the feasible Q in the price schedule.3. Compute TC using Formula 13–9 for Q and for all lower-cost price breaks. Remember to usethe corresponding H for each price.A small manufacturing firm uses roughly 3,400 pounds of chemical dye a year. Currently the firmpurchases 300 pounds per order and pays $3 per pound. The supplier has just announced that ordersof…
ABC ltd uses 6250 kg of raw material per year. It costs RM10 to hold 1 kg for One year, and the costs of ordering each consignment of raw materials are RM200. Calculate the following: a) The reorder quantity/ EOQ/ ROQ b) Ordering Cost c) Holding Cost d) Total cost of stock
The difference(s) between the basic EOQ model and theproduction order quantity model is(are) that:a) the production order quantity model does not requirethe assumption of known, constant demand.b) the EOQ model does not require the assumption ofnegligible lead time.c) the production order quantity model does not requirethe assumption of instantaneous delivery.d) all of the above.

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