A company that manufactures cars would use about 50,000 steering wheels per year Such steering wheel is being ordered from a supplier that would cost the company P1.250.00 per order it would also costs 40% of the steering wheel's cost to keep it annually. The steering wheel costs P7,500.00 each How many steering wheels should be ordered at one time? ** Need as soon as possible pls.

A company that manufactures cars would use about 50,000 steering wheels per year Such steering wheel is being ordered from a supplier that would cost the company P1.250.00 per order it would also costs 40% of the steering wheel's cost to keep it annually. The steering wheel costs P7,500.00 each How many steering wheels should be ordered at one time? ** Need as soon as possible pls.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter2: The Purchasing Process

Section: Chapter Questions

Problem 1GPE

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You are the manager of a retail store that sells home theater systems among other products. The weekly demand for these systems is 600. The warehouse you rent to store the inventory of home security systems charges you $8 per month for holding each unit of inventory. You buy these systems from a very reliable supplier for $250 per piece and sell each for $500 per piece. Each time you place an order to buy the systems from your supplier, you pay $416 as a fixed fee per order regardless of the quantity. Once the order is placed, the supplier takes exactly 1 week to deliver the order regardless of the quantity ordered. Please use this information to answer the following questions: a) What is the optimal order quantity (i.e. Economic Order Quantity OR EOQ - i.e. what quantity should be ordered per order) that would minimize the total annual ordering and holding costs? b) What is the ideal reorder level assuming no safety stock (i.e. the inventory level at which you should place the…
You are the manager of a retail store that sells home theater systems among other products. The weekly demand for these systems is 600. The warehouse you rent to store the inventory of home security systems charges you $8 per month for holding each unit of inventory. You buy these systems from a very reliable supplier for $250 per piece and sell each for $500 per piece. Each time you place an order to buy the systems from your supplier, you pay $416 as a fixed fee per order regardless of the quantity. Once the order is placed, the supplier takes exactly 1 week to deliver the order regardless of the quantity ordered. Please use this information to answer the following questions: a) What is the optimal order quantity (i.e. Economic Order Quantity OR EOQ - i.e. what quantity should be ordered per order) that would minimize the total annual ordering and holding costs? b) What is the ideal reorder level assuming no safety stock (i.e. the inventory level at which you should place the…
ou may need to use the appropriate technology to answer this question. A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspaper costs $1.14 per unit and sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with ? = 150 and ? = 30. (a)What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.) (b)What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.) (c)In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) What happens to the coffee shop's order quantity as the rebate is reduced? The…
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (A) Reorder Point 1. What should be the reorder point in boxes? 2. How much would the normal lead time usage be? 3. How much should ABC keep as safety stock? (B) Economic Order Quantity 4. What is the annual demand for the boxes of candles? 5. How much is the carrying cost of one box of candles for one year? 6. What is the economic order quantity for the…
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. (A) Reorder Point1. What should be the reorder point in boxes?2. How much would the normal lead time usage be?3. How much should ABC keep as safety stock?(B) Economic Order Quantity4. What is the annual demand for the boxes of candles?5. How much is the carrying cost of one box of candles for one year?6. What is the economic order quantity for the boxes of…
Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUs classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year; the item’s current characteristics are:Demand 1D2 = 15,080 units/yearOrdering cost 1S2 = $125.00/orderHolding cost 1H2 = $3.00/unit/yearLead time 1L2 = 5 weeksCycle@service level = 95 percentDemand is normally distributed, with a standard deviation of weekly demand of 64 units.a. Calculate the item’s EOQ.b. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item.c. Which system requires more safety stock and by how much?
Retailers Warehouse (RW) is an independent supplier of household items to department stores. RW attempts to stock enough items for a 98 percent service probability. A stainless steel knife set is one item it stocks. Demand (2,400 sets per year) is relatively stable over the entire year. Whenever new stock is ordered, a buyer must ensure that numbers are correct for stock on-hand and then phone in a new order. The total cost involved to place an order is about $5. RW figures that holding inventory in stock and paying for interest on borrowed capital, insurance, and so on, add up to about $4 holding cost per unit per year. Analysis of the past data shows that the standard deviation of demand from retailers is about four units per day for a 365-day year. Lead time to get the order is seven days. What is the economic order quantity? Note: Round your answer to the nearest whole number. What is the reorder point? Note: Use Excel's NORM.S.INV() function to find the z value. Round z…
Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually. Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually.
ou are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.50 a copy. You sell a copy of the San Pedro Times for $1.25. Daily demand is distributed normally with mean = 335 and standard deviation = 67. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. How many copies of the San Pedro Times should you buy each morning and what is the probability that you will run out of stock? Use Excel's NORM.S.INV() function to find the z value.
Suppose that a large discount retailer with a lot of purchasing power in a supply chain requires that all suppliers incorporate a new information system that will reduce the cost of placing orders between the retailer and its suppliers as well as between the suppliers and their suppliers. Suppose also that order quantities and lead times are related; the smaller the order quantity the shorter the lead time from suppliers. Assume that all members of the supply chain use a continuous review system and EOQ order quantities. Explain the implications of the new information system for the supply chain in general and the inventory systems of the supply chain members in particular.
PT Paya is a factory that produces umbrellas. This company requires 12,000 units of umbrella handles for 1 year. The ordering fee is Rp 50,000 for each order, regardless of the number of components ordered. Storage fee (per unit/year) is 10% of the component price. Material price Rp. 2500,- per unit. Working days in a year are 250 days. Delivery lead time is 4 days. The annual warning for umbrellas is 10,000 units per year. The umbrella production speed is 60 units per day. The set up fee for making an umbrella is Rp. 40.000,- per pair. The cost of storing umbrellas as a finished product is IDR 6000/unit/year. a) What is the most economical number of orders for umbrella handles (EOQ), order frequency, time interval between orders, reorder point and total cost?b) What is the POQ? What is the maximum supply? What is the Total Cost?
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?