A company stocks an item that is consumed at the rate of 30 units each day. Every time an order is placed for new supply, $ 120 must be paid. A unit inventory held in stock for one week will cost $ 0.14. What is the total annual cost if the order quantity is 200 more than EOQ? What is the optimum number of orders (rounded to the closest integer) that the company has to place each year? Assume that the company has a standing policy of not allowing shortages in demand.
Q: A product is ordered once each year, and the reorder point without safety stock (dL) is 100 units.…
A: Safety Stock Safety stock is a concept used to describe a degree of additional stock held to…
Q: Bads, Inc., sells an average of 1,000 food processors each year. Each order for foodprocessors…
A: Given that: Annual Demand, D = 1000 Lead Time, LT = 1 month Standard Deviation, σ = 69.82 Service…
Q: d setup costs are $200 per order. What is the minimum total stock administration cost for the…
A: The total cost of inventory is the sum of purchasing, ordering, and holding charges. The optimal…
Q: Daily demand for fresh cauliflower in the ZZ-Warehouse store follows normal distribution with mean…
A: Given that: Mean (μ) = 100 Standard Deviation (σ) = 20 Cost = $50 Selling Price = $70 Salvage cost =…
Q: A grocer purchases plums for $2.95 per pound and sells them for $4.62 per pound. At the end of the…
A:
Q: Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The…
A:
Q: A local retailer anticipates an annual demand 12000 units of a product. The retailers] allows…
A: Economic order quantity is the optimum quantity which should be ordered in order to have minimum…
Q: Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The…
A: Given data; Carrying cost 10 $ per kilo per year Stockout cost 75 $ per kilo Reorder point…
Q: A firm uses the order-up-to model to manage its inventory. It wants to increase its…
A: Holding cost - These are the inventories that remain unsold. The cost is comprised of total…
Q: XYZ Print Inc. uses plain paper for copying needs. Weekly demand for that paper follows a normal…
A: Given data: Weekly average demand=100 and the standard deviation =50, each week, a replenishment…
Q: An automotive warehouse stocks a variety of parts that are sold at neighborhood stores. One…
A: THE ANSWER IS AS BELOW:
Q: XYZ Print Inc. uses plain paper for copying needs. Weekly demand for that paper follows a normal…
A: Units to order = Order upto level - Onhand inventory - Order quantity Standard deviation in given…
Q: Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The…
A: Given data; Carrying cost 15 $ per kilo per year Stockout cost 70 $ per kilo Reorder point…
Q: 0 Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who…
A:
Q: Kids’ toys makes an order once each year an the reorder point, without safety stock, is 200 toys.…
A: Given data: Reorder point without safety stock is 200 toys Holding cost (H)= $5 Cost of stock-out…
Q: Cindy and Mindy were in the same student group while studying for their MBA at UTD. They graduated…
A: Since Cindy knows that Mindy learned only the EOQ model during her MBA, Cindy safely assumes that…
Q: Example 90. A company finds that the demand for an item is uniform at 10,000 units per year. It…
A: Economic Order Quantity is the quantity of an item ordered such that its total inventory costs are…
Q: An electronic manufacturer in San Francisco receives its motherboards from a supplier in Hong Kong.…
A: Given data Lead time (LT) = 3 weeks Cost = $19 Holding cost (H) = $0.6 per week Service level =…
Q: OfficePro sells calculators at a rate of 3 per day. When the company places an order from its…
A: Given: Selling rate = 3 per day Optimal order size = 80 units not > 10% chances of out of stock…
Q: A local retailer anticipates an annual demand 15000 units of a product. The retailer allows…
A: Below is the solution:-
Q: Consider the coffeehouse discussed below. Suppose that its setup cost for ordering was really only…
A: Fixed ordering cost K = $45 Demand rate D = 280 pounds per year Holding cost h = 2.40 × 0.2 = $0.48
Q: A local supermarket sells a popular brand of shampoo at a fairly steady rate of 380 bottles per…
A: Formula:
Q: Henrique Correa's bakery prepares all its cakesbetween 4 A.M. and 6 A.M. so they will be fresh when…
A: Given that: Mean demand (d) = 25 Standard deviation (s) = 4 Cost of a cake (c) = $6 Selling price…
Q: ir he achual onder quantity is the ecnomie order quantity in a problem that mets the asmumptione of…
A: The concept of Operation Management: Operation management is the management that applies to a…
Q: An automotive warehouse stocks a variety of parts that are sold at neighborhood stores. One…
A: Lot size-reorder point system is one of the multi period models. This system is denoted by decision…
Q: You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-findspices.…
A: Project management schedule contains a list of a project related activities and deliverables,…
Q: A book shop is planning to order calendars for sale starting in October. Only one order is placed.…
A: Given data Mean value = 500 Standard deviation =120 Ans 1: The single inventory model is best…
Q: Jam costs $10/jar, requires a 6mo. lead time, and Will sell for $35/jar. If you stock out, you'll…
A: EOQ stands for Economic Order Quantity. It is a measurement used in the field of Operations,…
Q: A drilling rig with an initial cost of P and a useful life of n years is assumed. What is the scrap…
A: Introduction: The term Business refers to an exchange of goods and services between the buyer and…
Q: A retailer sells winter jackets for $120 in the winter season. The cost of a jacket is $70. Unsold…
A:
Q: A company stocks an item that is consumed at the rate of 20 units each day. Every time an order is…
A: The question is related to the Inventory Management. In this question first we will calculate…
Q: A department store sells 10 000 cameras per year. The store orders cameras from a regional…
A: Economic order quantity (EOQ) is a company's optimal order quantity that undervalues its total costs…
Q: The demand faced by CBA company each week is estimated to be normally distributed with a mean of…
A:
Q: A hospital orders its thermometers from a hospitalsupply firm. The cost per thermometer depends on…
A: a) In case of EOQ79, the per unit cost c is lower and hence the denominator is lower. Lower…
Q: An automotive warehouse stocks a variety of parts that are sold at neighborhood stores One…
A: Given data, Monthly average demand, d = 280Stdev of monthly demand, s = 70Annual demand, D = 280*12…
Q: A local retailer anticipates an annual demand 12000 units of a product. The retailer allows…
A: Annual demand = 12000 unit Backorder rate= 3 OMR Ordering cost= 200 OMR Holding cost=1 OMR per unit…
Q: A large automobile repair shop installs about 1,250 mufflers per year, 18 percent of which are for…
A: Consider the following values given in the question: = total demand per year = 1,250…
Q: Quantity Discount: Consider a quantity discount problem where the yearly demand for the product is…
A: Given Information: Annual Demand (D) = 1480 units EOQ (Q) = 1394 units Ordering Cost (S) = $ 48…
Q: An electronic manufacturer in San Francisco receives its motherboards from a supplier in Hong Kong.…
A: Given Data Lead time (LT) = 3 weeks Cost = $16 per units Holding cost (H) = $0.5 per week…
Q: Parasol Systems sells motherboards for personal computers. For quantities upthrough 25, the firm…
A: Hence, the EOQ is 12 units.
Q: A manufacturer of exercise equipment purchases pulleys from a supplier who lists these prices: less…
A: Annual Usage = D = 4900 pulleys Ordering cost = S = $50 Holding cost = 20% We will consider initial…
Q: A firm experiences demand with a mean of 100 units perday. Lead time demand is normally distributed,…
A: Calculation of Annual cost of Holding safety stock Thus, the given value is E(X) = 1000Standard…
Q: A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement…
A:
Q: A department store uses a (Q, R) policy to control its inventories. Sales of a pocket FM…
A: Given data, Sales of pocket FM radio average is 1.4 radio per week. Radio Cost of the stores =…
Q: Milk is stocked at the grocery store each week. At the end of the week unsold milk is reduced in…
A: Below is the solution:-
Q: Hal Itosis is a candy wholesaler. He purchases cases of Altoids mints from a distributor at $20 each…
A: Ordering Cost (O) = 2420 Holding Cost (H) = 30% of 20 = 6 Annual Demand (D) = 3000*50 = 150000…
Q: A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed…
A: Daily Demand = 100 units per day Mean = 1000 units Standard Deviation = 200 units Holding Cost = H =…
Q: PC World stocks and sells a particular brand of personal computer. It costs the store £ 460 each…
A: The optimal order quantity is the quantity that the company need to buy so that its annual inventory…
A company stocks an item that is consumed at the rate of 30 units each day. Every time an order is placed for new supply, $ 120 must be paid. A unit inventory held in stock for one week will cost $ 0.14.
- What is the total annual cost if the order quantity is 200 more than EOQ?
- What is the optimum number of orders (rounded to the closest integer) that the company has to place each year?
- Assume that the company has a standing policy of not allowing shortages in demand.
Step by step
Solved in 2 steps with 3 images
- A firm experiences demand with a mean of 100 units perday. Lead time demand is normally distributed, with a meanof 1,000 units and a standard deviation of 200 units. It costs$6 to hold one unit for one year. If the firm wants to meet90% of all demand on time, what will be the annual cost ofholding safety stock? (Assume that each order costs $50.)The materials manager of a tire manfacturer must predict periodically place order for a key chemical one of the raw materials used in manufacturing uses the chemical at a rate of 300lbs each week and the lead time of delivery is 4 days. Assume that the manufacturing operation runs 5 days a week. At what point should the chemical be reorderedd a. when 1200lbs are remaining b. where 0lbs are remaining c. where 375lbs are remaining d. when 240lbs are remA product is ordered once each year, and the reorder point without safety stock (dL) is 100 units. Inventory carrying cost is $10 per unit per year, and the cost of a stockout is $50 per year. Given the following demand probabilities during the reorder period, how much safety stock should be carried? DEMAND DURING REORDER PERIOD PROBABILITY 0 .1 50 .2 ROP 100 .4 150 .2 200 .1
- An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?What quantity discount should the manufacturer offer the retailer in order to minimize the total supplychain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does theretailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODELA firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.
- The best quantity to order One of the formulas for inventorymanagement says that the average weekly cost of ordering, payingfor, and holding merchandise iswhere q is the quantity you order when things run low (shoes,TVs, brooms, or whatever the item might be); k is the cost ofplacing an order (the same, no matter how often you order); c isthe cost of one item (a constant); m is the number of items soldeach week (a constant); and h is the weekly holding cost per item(a constant that takes into account things such as space, utilities,insurance, and security). Find dA>dq and d2A>dq2.Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year.The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000- tires a re ordered, and $17 per tire if I ,000 or more tires areordered.a) How many tires should Rocky Mountain order each time it places an order?b) What is the total cost of this policy?Parasol Systems sells motherboards for personal computers. For quantities upthrough 25, the firm charges $350 per board; for quantities between 26 and 50,it charges $315 for each board purchased beyond 25; and it charges $285 eachfor the additional quantities over 50. A large communications firm expects torequire these motherboards for the next 10 years at a rate of at least 140 peryear. Order setup costs are $30 and holding costs are based on an 18 percentannual interest rate. What should be the size of the standing order?
- An automotive warehouse stocks a variety of parts that are sold at neighborhood stores. One particular part, a popular brand of oil filter, is purchased by the warehouse for $1.50 each. It is estimated that the cost of order processing and reciept is a $100 per order. The company uses an inventory carrying charge based on 28 percent annual interest rate. The monthly demand for the filters follows a normal distribution with mean 280 and a standard deviation 77. Order lead time is assumed to be 5 months. Assume that if a filter is demanded when the warehouse is out of stock, then the demand is back-ordered and the cost assessed for each back-ordered demand is $12.80. Determine the following quantities: a. The optimal values of the order quantity and the reorder level. b. The average annual cost of holding, setup, and stock-out associated with this item assuming that an optimal policy is used. c. Evaluate the cost of uncertanity for this process. That is, compare the average annual cost…A company has a chance to reduce their inventory ordering costs by placing larger quantity orders using the discount schedule below. What should their optimal order quantity be if this company purchases this single inventory item with an e-mail ordering cost of $4, an annual holding cost rate (per unit) of 2% of the price/unit, and an annual demand of 10,000 units? Order quantity (units) Price/unit ($) 0 to 2,499 1.20 2,500 to 3,999 1.00 4,000 or more 0.98A company has an annual demand of 2500 units. The cost to place an order to replenish inventory is SR18.75 per order, and annual inventory holding cost per unit is SR1.5. On average, delivery of an order takes 3 working days (Lead time). Assume the store is open 250 days per year. What is the optimal order size? What is the optimal number of orders per year? What is the optimal number of days between orders? What is the Reorder Point (ROP)? What is the Reorder Point (ROP) with 2 days safety stock.