a) What is the optimal size of the production run? b) What is the average holding cost per year? $ 3653 units (round your response to the nearest whole number). (round your response to two decimal places)
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- 1. David and Beth Sheba run a health food store. Their top selling item is called Heavenly Kelp. The annual demand for this is 3200 units, and demand is constant throughout the year. The cost of placing an order is $100, while the holding cost per unit per year is $4. How many orders per year should be placed if they wish to minimize their total cost ? If you want to be eligible for partial credit, give an idea as to how you arrived at that number?Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is theFrench Bete Noire, which is shipped directly from France. Weekly demand is 45 cases.Millennium purchases each case for $120, there is a $300 fixed cost for each order(independent of the quantity ordered), and its annual holding cost is 25 percent.a. What order quantity minimizes Millennium’s annual ordering and holding costs?b. If Millennium chooses to order 300 cases each time, what is the sum of its annualordering and holding costs?c. If Millennium chooses to order 100 cases each time, what is the sum of the orderingand holding costs incurred by each case sold?d. If Millennium is restricted to ordering in multiples of 50 cases (e.g., 50, 100, 150, etc.),how many cases should it order to minimize its annual ordering and holding costs?e. Millennium is offered a 5 percent discount if it purchases at least 1000 cases. If itdecides to take advantage of this discount, what is the sum of its annual…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?
- HAL Ltd. produces a line of high-capacity disk drives for computers. The housings for the drives are produced in Hamilton, Ontario at a rate of 250 housings per month, and shipped to the main plant in Toronto. The housings cost HAL $100 each to produce, and the setup cost for beginning a production run is $500. HAL uses the drive housings at a fairly steady rate of 1400 per year. Assume an annual interest rate of 25% for determining the holding cost. What is the optimal number of housings for HAL to produce in each production run? For the optimal production size, what proportion of each production cycle consists of uptime and what proportion consists of downtime? Assuming that HAL produces the optimal number of housings in each production run, what is the maximum on-hand inventory level of these housings? What is the annual cost of holding and setup?Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,300 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $51. The cost of each light is $0.95. The holding cost is $0.05 per light per year.Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 45 cases. Millennium purchases each case for $120, there is a $300 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 25 percent.
- Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 50 cases. Assume Millennium Liquors operates 52 weeks in a year. Millennium purchases each case for $100, there is a $260 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 20 percent. If Millennium is restricted to ordering in multiples of 100 cases (e.g., 100, 200, 300, etc.), how many cases should it order to minimize its annual ordering and holding costs? (round to the nearest integer)Buckley Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000units. The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs thebusiness $75 to place a single order. Currently the business places 12 orders each year.i) What is the total stock administrative cost of Buckley’s current inventory policy?ii) Is this the entity’s cost minimizing solution for this product each year? Explain.The manager of a large electronics store wants to begin stocking a universal TV remote control device. Expected daily demand is 25 units (250 working days a year). The remote controls can be purchased from either supplier A or supplier B. Their price lists are as follows: Supplier A Supplier B Quantity Unit price Quantity Unit price 1-199 $14 1-149 $14.1 200-499 $13.8 150-349 $13.9 500+ $13.6 350+ $13.7 Ordering cost is $40 per order and annual holding cost is 25 percent of unit price. Lead time for either supplier is 10 days. Which supplier should be chosen and what kind of inventory ordering policy should be adopted?
- I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…Harvey’s Specialty Shop is a popular spot that specializes in international gourmet foods. Oneof the items that Harvey sells is a popular mustard that he purchases from an English company.The mustard costs Harvey $10 a jar and requires a six-month lead time for replenishment ofstock. Harvey uses a 20 percent annual interest rate to compute holding costs and estimatesthat if a customer requests the mustard when he is out of stock, the loss-of-goodwill cost is $25a jar. Bookkeeping expenses for placing an order amount to about $50. During the six-monthreplenishment lead time, Harvey estimates that he sells an average of 100 jars, but there issubstantial variation from one six-month period to the next. He estimates that the standarddeviation of demand during each six-month period is 25. Assume that demand is described bya normal distribution. How should Harvey control the replenishment of the mustard?A detergent manufacturer manages a plant for a major retail. The average monthly demand is 12,000 jugs of detergent. Each jug costs $(1.3) and is sold to the retailer at a wholesale price of $8. The manufacturer and the retailer use an annual holding cost of (29)%. For each order placed, the retailer incurs an ordering cost of $80. Manufacturer incurs the cost of transportation and loading which totals $2,000 per order shipped. a. To minimize its inventory-related costs, what lot size will be the best for the retailer? What is the annual inventory-related cost of the manufacturer and the retailer as a result of this policy? b. What lot size minimizes the inventory-related costs across both the manufacturer and the retailer? How much reduction in cost relative to (a) results from this policy? c. Design an all-unit quantity discount that results in the retailer ordering the quantity in (b).