1. A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUS. Following are thecharacteristics of one item:> Demand (D) = 92 units/week (Assume 50 weeks per year)> Ordering and setup cost (S) = $55/order> Holding cost (H) = $16/unit/year> Lead time (L) = 5 week(s)> Standard deviation of weekly demand = 23 units> Cycle-service level = 92 percent> EOQ = 178 unitsUsing the above information, develop the best policies for a periodic review system. Refer to the tandard normal table for z-values.a. What value of P gives the same approximate number of orders per year as the EOQ? weeks. (Enter your response rounded to the nearest whole number.)b. To provide a 92 percent cycle-service level, the average safety stock is units. (Enter your response rounded to the nearest whole number.)To provide a 92 percent cycle-service level, the target inventory level isunits. (Enter your response rounded to the nearest whole number.) 0.050.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.53590.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.57540.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.61410.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.65170.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.68790.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.72240.7258 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7518 0.75490.7580 0.7612 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.78520.7881 0.7910 0.7939 0.7967 0.7996 0.8023 0.8051 0.8079 0.8106 0.81330.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.83890.8413 | 0.8438 | 0.8461 | 0.8485 0.8508 0.8531 0.8554 | 0.8577 |0.8599 0.86210.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.88300.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.90150.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.91770.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.93190.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9430 0.94410.9452 0.9463 0.9474 0.9485 0.9495 0.9505 0.9515 0.9525 0.9535 0.95450.9554 0.9564 0.9573 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.96330.9641 0.9649 0.9656 0.9664 0.9671 0.9678 0.9686 0.9693 0.9700 0.97060.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9762 0.97670.9773 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.98170.9821 0.9826 0.9830 0.9834 0.9838 0.9842 0.9846 0.9850 0.9854 0.98570.9861 0.9865 0.9868 0.9871 0.9875 0.9878 0.9881 0.9884 0.9887 0.98900.9893 0.9896 0.9898 0.9901 0.9904 0.9906 0.9909 0.9911 0.9913 0.99160.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.99360.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.99520.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.99640.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.9971 0.9972 0.9973 0.99740.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.9979 0.9980 0.9980 0.99810.9981 0.9982 0.9983 0.9983 0.9984 0.9984 0.9985 0.9985 0.9986 0.99860.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.99900.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.9992 0.9992 0.9993 0.99930.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.9994 0.9995 0.9995 0.99950.9995 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.99970.000.010.020.030.040.060.070.080.090.00.10.20.30.40.50.60.70.80.91.01.11.21.31.41.51.61.71.81.92.02.12.22.32.42.52.62.72.82.93.03.13.23.3o oNco g o

The economic order quantity (EOQ) is the amount of inventory that a firm should order in order to…

Answered: A company begins a review of ordering…

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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Ken Ramsing has been in the lumber business for most of his life. Ken’s biggest competitor is Pacific Woods. Through many years of experience, Ken knows that the ordering cost for an order of plywood is $25 and that the carrying cost is 25% of the unit cost. Both Ken and Pacific Woods receive plywood in loads that cost $100 per load. Furthermore, Ken and Pacific Woods use the same supplier of plywood, and Ken was able to find out that Pacific Woods orders in quantities of 4,000 loads at a time. Ken also knows that 4,000 loads is the EOQ for Pacific Woods. What is the annual demand in loads of plywood for Pacific Woods?
Southern Markets, Inc., is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.
The basic EOQ model is based on all the following assumptions except: * Estimates of ordering and carrying costs are accurate. Order is instantaneously received exactly when previous inventory has just been used up. Annual demand is known and constant. The item is always available when needed.
Southern Markets, Inc., is considering the use of ABC analysis to focus on the most critical SKUs in its inventory. Currently, there are approximately 20,000 different SKUs with a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and the total annual dollar usage for A items, B items, and C items at Southern Markets, Inc.?350 PART 2 Managing Customer Demandb. The following table provides a random sample of the unit values and annual demands of eight SKUs. Categorize these SKUs as A, B, and C items.SKU Code Unit Value Demand (Units)A104 $2.10 2,500D205 $2.50 30X104 $0.85 350U404 $0.25 250L205 $4.75 20S104…
In the basic EOQ model, the average inventory level is equal to one-half this value: * Maximum inventory level.Order quantity.Reorder pointBoth A and B.
The economic purchase lot is an important tool for companies that want to minimize the total cost of inventories. This cost is formed by the sum of the annual order, annual storage and annual acquisition costs, with the economic purchase lot being the minimum point of the total annual cost curve. Regarding the economic lot, mark the correct alternative: ( ) The annual storage cost is independent of the economic lot size of purchase ( ) The annual ordering cost can be considered equal to zero if the company makes all purchases of materials without delay. ( ) The demand does not need to be known for the economic purchase lot to be found, as it is not used in the calculation of the total annual cost. ( ) The annual acquisition cost is calculated from the values of the safety stock level that the company intends to use throughout the year ( ) The economic purchase lot can also be found disregarding the annual acquisition cost, as this is always constant
Golden Crust Bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual holding costs are $75 per bag. Once an order for flour is placed, it takes six (6) days to receive the order from the flour factory. The bakery operates 350 days per year. Calculate the following: Economic Order Quantity Expected number of orders (Order Frequency) Average inventory The annual holding cost The annual ordering cost The total annual cost of inventory management Reorder point If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
During the last 5 weeks, demands for a certain SKU at a retailer were 7 units (5 weeks ago), 4 units, 4 units, 4 units, and 5 units (last week). The retailer uses a period review model with order-up-to level 71 units, a review period of 2 weeks, and the lead time is 11 weeks. It is time to order. How much should the retailer order?
The two-bin approach is used to control inventory for a particular low-cost component. Each bin holds 1000 units. The annual usage of the component is 40,000 units. Cost to order the component is around $50. (a) What is the imputed holding cost per unit for this data? (b) If the actual annual holding cost per unit is only 5 cents, what lot size should be ordered? (c) How much more is the current two-bin approach costing the company annually, compared to the economic order quantity?
A firm that sells 5,000 blivets per month is trying to determine how many blivets to keep in inventory. The financial manager has determined that it costs $200 to place an order.The cost of holding inventory is 4 cents per month per average blivet in inventory. A five-day lead time is required for delivery of goods ordered. (This lead time is known with certainty.) The operating days per year is 250. What is the economic order quantity? What is the reorder point? At the EOQ level, what is the total carrying cost per month? At the EOQ level, what is the total ordering cost per month?
Pls do fast within 5 minutes and i will give like for sure Solution must be in typed form Taylor Supply is a wholesaler of office supplies and equipment. Taylor purchases cartons of staples from Barker Manufacturing. Barker offers a price of $7 per carton of staples. Taylor incurs a fixed charge of $90 per order to cover order equipment and clerical costs. Each order takes 3 days to arrive . Taylor has projected sales to be 603 boxes per day. Taylor's accounting department has determined the holding costs relevant for inventory decisions are 28% of unit cost. Assume Q=3000. What is the demand for staples during lead time? 1) Assume Q=3000. What is the demand for staples during lead time? 2) Assume Q=3000. What z value is associated with a 90% confidence level? 3) Assume Q=3000. If Taylor wants a 90% service level, and the standard deviation in daily demand is 250, what is the appropriate reorder point? 4) Assume Q=3000. If Taylor wants to improve their service level to 95%, and…
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 48,400 units per year, an ordering cost of $3 per order, and carrying costs of $1.50 per unit. a. What is the economic ordering quantity? _____________Units b. How many orders will be placed during the year? _____________Orders c. What will the average inventory be? ____________Units d. What is the total cost of ordering and carrying inventory? $__________

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