a. If demand for the new videotape recorder is expected to be constant with a rate of 20 units per month, what is the recommended order quantity for the videotape recorder?b. What are the estimated annual inventory holding and ordering costs associated with this product?c. How many orders will be placed per year?d. With 250 working days per year, what is the cycle time for this product? Tele-RecoTele-Reco is a new specialty store that sells television sets, videotape recorders, video games,and other television-related products. A new Japanese-manufactured videotape recorder costsTele-Reco $600 per unit. Tele-Reco's annual holding cost rate is 22%. Ordering costs areestimated to be $70 per order.a. If demand for the new videotape recorder is expected to be constant with a rateof 20 units per month, what is the recommended order quantity for the videotaperecorder?b. What are the estimated annual inventory holding and ordering costs associatedwith this product?c. How many orders will be placed per year?d. With 250 working days per year, what is the cycle time for this product?

Monthly demand d20Annual demandD240Setup costCo70Holding costCh132Unit costU600Working days W250

a. If demand for the new videotape recorder is expected to be constant with a rate of 20 units per month, what is the recommended order quantity for the videotape recorder? b. What are the estimated annual inventory holding and ordering costs associated with this product? c. How many orders will be placed per year? d. With 250 working days per year, what is the cycle time for this product?

a. If demand for the new videotape recorder is expected to be constant with a rate of 20 units per month, what is the recommended order quantity for the videotape recorder? b. What are the estimated annual inventory holding and ordering costs associated with this product? c. How many orders will be placed per year? d. With 250 working days per year, what is the cycle time for this product?

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

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Similar questions

The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
Joe Henry's machine shop uses 2,450 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,450 Holding cost per bracket per year $1.65 Order cost per order $18.50 Lead time 2 days Working days per year 250 a) What is the EOQ? __units (round your response to two decimal places). b) What is the average inventory if the EOQ is used?__ units (round your response to two decimal places). What would be the annual inventory holding cost? $__ (round your response to two decimal places). c) Given the EOQ, how many orders will be made annually?__orders (round your response to two decimal places). What would be the annual order cost? $__ (round your response to two decimal places). d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? __ $ (round your response to two decimal places). d)…
Joe Henry's machine shop uses 2,530 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,530 Holding cost per bracket per year $1.65 Order cost per order $18.25 Lead time 2 days Working days per year 250 Part 2 a) What is the EOQ? enter your response here units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? enter your response here units (round your response to two decimal places). What would be the annual inventory holding cost? $enter your response here (round your response to two decimal places). Part 4 c) Given the EOQ, how many orders will be made annually? enter your response here orders (round your response to two decimal places). What would be the annual order cost? $enter your response here (round…
The Metropolitan Book Company purchases paper from the Atlantic Paper Company. Metropolitanproduces magazines and paperbacks that require 1,215,000 pounds of paper per year. Thecost per order for the company is $1,200; the cost of holding 1 pound of paper in inventory is$0.08 per year. Determine The economic order quantity
Joe Henry's machine shop uses 2,460 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,460 Holding cost per bracket per year $ 1.65 Order cost per order $20.00 Lead time 22 days Working days per year 250 a) What is the EOQ? b) What is the average inventory if the EOQ is used? What would be the annual inventory holding cost? c) Given the EOQ, how many orders would be made each year? What would be the annual order cost? d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? e) What is the time between orders? f) What is the reorder point (ROP)?
Myer stores carries a specialty line of flavored syrups. One of the most popular of these is a raspberry syrup which sells on average, 55 bottles per week. Myers cost is nine dollars per bottle. Meyer has determined it’s order cost to be $54 an inventory caring cost is 20%. Myers open for business 52 weeks per year. What is the EOQ for raspberry syrup? (Whole Number) If Meyer orders the EOQ quantity each time, what will be the inventory turnover rate for raspberry syrup? (Round your answer to 2 decimal spaces)
Discount-Mart (see Problem 16.8), as part of its newLean program, has signed a long-term contract with SpecialtyLighting and will place orders electronically for its halogen lamps.Ordering costs will drop to $.50 per order, but Discount-Mart alsoreassessed its carrying costs and raised them to $20 per lamp.a) What is the new economic order quantity?b) How many orders will now be placed?c) What is the total annual cost of managing the inventory withthis policy?
Grey Wolf Lodge is a popular 500-room hotel in the North Woods. Managers need to keep close tabson all room service items, including a special pine-scented bar soap. The daily demand for the soap is275 bars, with a standard deviation of 30 bars. Ordering cost is $10 and the inventory holding cost is$0.30/bar/year. The lead time from the supplier is 5 days, with a standard deviation of 1 day. The lodgeis open 365 days a year.a. What is the economic order quantity for the bar of soap?b. What should the reorder point be for the bar of soap if management wants to have a 99 percentcycle-service level?c. What is the total annual cost for the bar of soap, assuming a Q system will be used?
University Drug Pharmaceuticals orders its antibiotics every two weeks (14 days) when a salesperson visits from one of the pharmaceutical companies. Tetracycline is one of its most prescribed antibiotics, with average daily demand of 2,000 capsules. The standard deviation of daily demand was derived from examining prescriptions filled over the past three months and was found to be 800 capsules. It takes f ive days for the order to arrive. University Drug would like to satisfy 99 percent of the prescriptions. The salesperson just arrived, and there are currently 25,000 capsules in stock.How many capsules should be ordered?
Mattress Firm sells water beds and assorted supplies. Their best-selling bed has an annual demand of 395 units. Ordering cost is $43; holding cost is $5 per unit per year. a) To minimize the total cost, how many units should be ordered each time an order is placed? EOQ = units (round your response to the nearest whole number). b) If the holding cost per unit was $6.00 instead of $5, what would the optimal order quantity be? New EOQ = units (round your response to the nearest whole number).
The McDonald’s fast-food restaurant on campus sells an average of 4,000 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 350 pounds of hamburger in stock. Assume that the hamburger patties cost $1.00 a pound and there are 52 weeks in a year. What is the inventory turnover for the hamburger patties? Note: Do not round intermediate calculations. Round your answer to 1 decimal place. On average, how many days of supply are on-hand? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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 12,200 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs $51. The cost of each light is $1.00. The holding cost is $0.15 per light per year. d. What is the total cost per year, including the cost of the lights? (round your response to two decimal places).