4. Quantity Discount Model Unitex, the manufacturer of clear cosmetic boxes in problem (2), consumes 379 rolls of PVC sheets annually. Ordering costs are P510 and canrying costs are P150 per roll a year. Given the following infomation, determine the optimal order quantity and the total cost. Range 1 to 49 Price 620 50 to 79 480 80 to 99 340 100 or more 210

4. Quantity Discount Model Unitex, the manufacturer of clear cosmetic boxes in problem (2), consumes 379 rolls of PVC sheets annually. Ordering costs are P510 and canrying costs are P150 per roll a year. Given the following infomation, determine the optimal order quantity and the total cost. Range 1 to 49 Price 620 50 to 79 480 80 to 99 340 100 or more 210

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 14P

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A supplier for St. LeRoy Hospital has introduced quantity discounts to encourage larger order quantities of aspecial catheter. The price schedule isOrder Quantity Price per Unit0 to 299 $60.00300 to 499 $58.80500 or more $57.00The hospital estimates that its annual demand for this item is 936 units, its ordering cost is $45.00 per order,and its annual holding cost is 25 percent of the catheter’s unit price. What quantity of this catheter should thehospital order to minimize total costs? Suppose the price for quantities between 300 and 499 is reduced to$58.00. Should the order quantity change?
1. Electronic Village stocks and sells a particular brand of a personal computer. It costs the store $450 each time it orders with the manufacturer for the personal computers. The annual cost ofcarrying the PCs in inventory is $170. The store manager estimates the annual demand for the PCs will be 1,200 units. a. Determine the optimal order quantity and the total minimum inventory cost. B.Assume that shortages are allowed and that the shortage cost is $600 per unit per year. Compute the optimal order quantity and the total minimum inventory cost. 2. A computer products store stocks color graphics monitors, and the daily demand is normally distributed, with a mean of 1.6 monitors and a standard deviation of 0.4 monitor. The lead time to receive an order from the manufacturer is 15 days. Determine the reorder point that will achievea 98% service level.
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)
The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual 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.
The demand for a clothing brand is shown in the table below. The cost per order is about $4000. Cost of each unit of clothing = $5. Carrying cost percentage = 25% per item per 5 months. The analysis period = 5 month duration. Month Demand 1 400 2 300 3 200 4 400 5 500 a. Using this data, compute the solutions using the Lot for Lot and Periodic Order Quantity heuristics? Which of these heuristics would perform better and why? b. Assuming that the demand follows a normal distribution with the mean and variance from the data given above, determine the optimal order should be greater or lesser than the single period EOQ model.
If the following data is known in determining the Quantity Discount with EOQ - Demand rate = 100.000 - Ordering Cost = 5000 - Holding/Carrying cost = 600 Price Range LOWER UPPER PRICE 1 1 1000 1000 2 1001 1500 900 3 1501 3000 800 4 3001 3500 700 5 3501 3750 650 6 3751 4000 600 Based on the data provided, determine the optimal order quantity and total cost for this case! 2 1001 1500 900 3 1501 3000 800 4 3001 3500 700 5 3501 3750 650 6 3751 4000 600
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
A company has an annual demand for a specific item of 12,000 units. The carrying cost per unit per year is R.50, and the cost to place an order is R80. Calculate the Economic Order Quantity (EOQ) and also explain the following related terms • Re-order Level, • Ordering Point, • and Minimum Level.
Miguel has a product with an annual holding cost percentage of 20%, an ordering cost of $110 per order, and annual demand of 15,000 units. The following price schedule applies to the product from a supplier. What is the optimal order quantity? Show all work including a graph. Units Price 1-250 $30.00 251-500 $28.00 501-750 $26.00 ≥ 751 $25.00
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)?
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