8. Three types of motors are being inventoried by a company. The inventory carrying costrate is 15%. Total space available is 1500 ft. Using the following information todetermine the optimum order quantity for each motor with the space constraint. Solve bytrial and error using excel.Motor 1Motor 3Motor 220005 USDDemand per year150030007.5 USD50 USD2.5 ft?Item cost10 USD50 USD0.5 ft?50 USDOrdering costFloor space/item1.0 ft

carrying cost = Order quantity / 2 x carrying cost per unit Ordering cost = Demand / order…

Answered: 8. Three types of motors are being…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter3: Introduction To Optimization Modeling

Section3.8: A Multiperiod Production Model

Problem 22P

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c. Once you find the optimal order quantity i.e., EOQ, create a Data Table that generates inventory cost within ±100 units (with 10units increment) from the optimal order quantity. For example, if the EOQ=150, then you need to generate Data Table for inventory cost starting from 50 to 250 with 10 increments. Explain the exact steps completed in excel to create the data table d. Create a Scatter plot with “smooth lines” for the Data Table created in c) to show the inventory cost. Label your plot clearly (axis and title). The optimum order quantity should indicate the minimum cost in your plot.
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation: Let Dj = annual demand for item j Cj = unit cost of item j Sj = cost per order placed for item j i = inventory carrying charge as a percentage of the cost per unit W = the maximum amount of space available for all goods wj = space required for item j The decision variables are Qj, the amount of item j to order. The model is:…
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation: Let Dj = annual demand for item j Cj = unit cost of item j Sj = cost per order placed for item j i = inventory carrying charge as a percentage of the cost per unit W = the maximum amount of space available for all goods wj = space required for item j The decision variables are Qj, the amount of item j to order. The model is: (view…
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.
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?
You are currently working as a manager in a retail company. It is known that the company sells 2,500 cartons of cooking oil per year. The cost for each reorder cost of cooking oil is Rp. 750,000 and the carrying cost is Rp. 150,000. By using the Economic Order Quantity (EOQ) formula, determine how many units are optimal for each order?
Suppose demand is know and constant at 500 units per year (one year has 250 working days). The holding cost is $2 per unit per year and the ordering cost is $20 per order. Also assume that the lead time is 10 days. Compute the optimal order quantity (EOQ) and the optimal annual inventory cost. Draw a picture of the evolution of the inventory level with time. Indicate the ROP on the picture as well as the length of the cycle. Now assume that the lead time is 90 days. Indicate the ROP on the picture.
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost, and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation: Let Dj = annual demand for item j Cj = unit cost of item j Sj = cost per order placed for item j i = inventory carrying charge as a percentage of the cost per unit W = the maximum amount of space available for all goods wj = space required for item j The decision variables are Qj , the amount of item j to order. The model is: In…
The maintenance department in Ranchi Hospital uses 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 $16 per case. Determine the optimal order quantity and the total cost.
Please solve this. Lebar Daun Sdn Bhd is planning to use the economic order quantity model to determine the optimal order levels of raw materials. Material Z is consumed evenly over the year and the current usage is 120,000 units. The material is purchased in boxes and each box contains 12 units of material Z, at a price of RM252 per box. A safety stock of 200 boxes is kept. The cost of placing and handling orders is estimated to be RM6,300, which is based cost incurred for similar orders that have already made. The cost of RM6,300 was for 30 orders. The inflation of 2 per cent should be added to the above ordering costs. Besides, the company estimates to be charged the transporation cost of RM15 per order. It should be assumed that ordering costs change in proportion to the number of orders place. Other costs which relate to material Z such as insurance, interest and space costs for a year, were calculated at 15 % of the purchase price. Required: a. Calculate the order quantity that…
Problem 20-40 (Algo) 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 ANNUALUSAGE ITEMNUMBER ANNUALUSAGE 1 $ 1,600 11 $ 13,200 2 12,200 12 700 3 2,300 13 42,400 4 50,500 14 10,100 5 11,600 15 1,300 6 900 16 10,400 7 2,100 17 4,100 8 11,200 18 61,600 9 5,200 19 3,600 10 15,200 20 3,000 a. Classify each item in inventory using an ABC plan.
In Lecture 5 we extended the newsvendor solution to the infinite horizon problem when there is no order lead time. Now suppose that the order lead time is L periods throughout the infinite horizon: if an order is placed at the beginning of period t, it arrives at the beginning of period t+L. Can we still extend the newsvendor solution to the infinite horizon problem in the case of backordering? Why or why not? Would your answer change in the case of lost sales? Why or why or not? I WANT LONG AND CLEAR EXPLANATION NOT AN 1 SENTENCE!!!!!!

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