Alocal Omani retail store finds out the its competition is ordering 500 kgs each order of a coffee brand. Over years the local Omani store has realized that its competition has adopted an economic ordering quantity (EOQ) policy for ordering. Whereas, local Omani store has determined that it take OMR 25 to order and the annual holding cost is 25% of the price of the coffee brand. The price of the coffee brand is OMR 100 per kg. What is the annual demand for this coffee brand? Round up to the nearest integer None is correct O b. 100,000 150,000 O d. 90,000 125,000

Alocal Omani retail store finds out the its competition is ordering 500 kgs each order of a coffee brand. Over years the local Omani store has realized that its competition has adopted an economic ordering quantity (EOQ) policy for ordering. Whereas, local Omani store has determined that it take OMR 25 to order and the annual holding cost is 25% of the price of the coffee brand. The price of the coffee brand is OMR 100 per kg. What is the annual demand for this coffee brand? Round up to the nearest integer None is correct O b. 100,000 150,000 O d. 90,000 125,000

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Description: NING SYSTEM (ACADEMIC)tory Management - Spring21Time left 1:14:19Alocal Omani retail store finds out the its competition is ordering 50O kgs each order of a coffee brand. Over years thelocal Omani store has realized that its competition has adopted

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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Part 1 Sam's Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: Demandequals=75 bags/week Orde costequals=$55.00/order Annual holding costequals=35 percent of cost Desired cycle-service levelequals=80 percent Lead timeequals=4 weeks (24 working days) Standard deviation of weekly demand equals=15 bags Current on-hand inventory is 320 bags, with no open orders or backorders. Part 2 a. Suppose that the weekly demand forecast of 75 bags is incorrect and actual demand averages only 50 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be ___ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)
Answer bold italicized questions Using excel. The Metropolitan Bus Company (MBC) purchases diesel fuel from AmericanPetroleum Supply. In addition to the fuel cost, American PetroleumSupply charges MBC $250 per order to cover the expenses of deliveringand transferring the fuel to MBC’s storage tanks. The lead time for anew shipment from American Petroleum is 10 days; the cost of holding agallon of fuel in the storage tanks is $0.04 per month, or $0.48 peryear; and annual fuel usage is 150,000 gallons. MBC buses operate 300days a year.a.What is the optimal order quantity for MBC?b.Howfrequently should MBC order to replenish the gasoline supply?c.TheMBC storage tanks have a capacity of 15,000 gallons. ShouldMBC consider expanding the capacity of its storage tanks?d.What isthe reorder point?
The distribution manager for Putnam Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale value $100 Annual demand 50,000 units Std. Deviation of Demand 30 units per day Working year 250 days Production lead time 9 days Ordering cost for production $1,800 Holding cost per unit per year 20% of value Desired service level 96 percent: If Putnam wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
The distribution manager for Putnam Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale value $100 Annual demand 50,000 units Std. Deviation of Demand 30 units per day Working year 250 days Production lead time 9 days Ordering cost for production $1,800 Holding cost per unit per year 20% of value Desired service level 96 percent If Putnam decides to use a continuous review system, what should be economic order quantity, safety stock, and the reorder point.
Genesis Company is a wholesaler. It purchases 60,000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma.Example: 10,000 Required: a. Compute the economic order quantity. b. How many orders would be placed under the EOQ policy? c. Compute the annual ordering cost for the EOQ. d. Compute the annual carrying cost for the EOQ. e. Compute the total inventory-related cost at the EOQ.
A local artisan uses supplies purchased from an overseas supplier. The ownerbelieves the assumptions of the EOQ model are met reasonably well. Minimization ofinventory cost is her objective. Relevant data, from the files of the credit firm, are annualdemand (C) = 240 units, ordering cost (B) = 42 MU/order, and holding cost = 4MU/unit/year.a) How many should she order at one time?b) How many times per year will she replenish its inventory of this material?c) What will be the total inventory costs associated with this material? Please mention formulas and do it in detail so I can understand.
Sam’s Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about these bags.Demand = 90 bags/weekOrder cost = $54/orderAnnual holding cost = 27 percent of costDesired cycle@service level = 80 percentLead time = 3 weeks 118 working days2Standard deviation of weekly demand = 15 bagsCurrent on-hand inventory is 320 bags, with no open orders or backorders.a. What is the EOQ? What would be the average time between orders (in weeks)?b. What should R be?c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?d. The store currently uses a lot size of 500 bags (i.e., Q = 500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?e. What would be the annual cost saved by shifting from the 500-bag lot size to the…
The EOQ model with quantity discounts attempts todetermine:a) the lowest amount of inventory necessary to satisfy acertain service level.b) the lowest purchase price.c) whether to use a fixed-quantity or fixed-period orderpolicy.d) how many units should be ordered.e) the shortest lead time
Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. The following data for 2020 has been provided: Expected annual demand for Galaxy jerseys 10,000 Shirts Ordering cost per purchase order Shs.200 Holding cost per year Shs 7 per jersey Each jersey is purchased at a cost of Shs.40 and sells for Shs.80. The purchasing Delivery time is 7 days. FB is open 365 days a year.Required:i) Calculate the EOQ.
The distribution manager for Divine Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale Value $100 Annual Demand 50,000 units Standard Deviation of Demand 30 units per day Working Year 250 days Production Lead Time 9 days Ordering Cost for Production $1,800 Holding Cost per unit per year 20% of value Desired Service Level 96 percent If Divine decides to use a continuous review system, what should be economic order quantity, safety stock, and the reorder point? If on the other hand, Divine wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
ESTRELLA is a bike retailer located in the outskirts of Bacolod City. ESTRELLA purchases bikes from STORAGEHUB in orders of 250 bikes which is the current economic order quantity. STORAGEHUB is now offering the following bulk discounts to its customers: Price 0% discount on orders less than 499 P3,500 10% discount on orders above 500 units - 999 3,150 15% discount on orders above 1,000 units 2,975 ESTRELLA is wondering if the EOQ model is still the most economical and whether increasing the order size would actually be more beneficial. Following information is relevant to forming the decision: Annual demand is 5000 units Ordering cost is $100 per order Annual holding cost is 25% QTY SETUP HOLDING PROODUCT COST TOTAL COST Q1 25423.73 25812.5 what is the product cost what is the total cost Q2 3000 198437.5 what is…
ESTRELLA is a bike retailer located in the outskirts of Bacolod City. ESTRELLA purchases bikes from STORAGEHUB in orders of 250 bikes which is the current economic order quantity. STORAGEHUB is now offering the following bulk discounts to its customers: Price 0% discount on orders less than 499 P3,500 10% discount on orders above 500 units - 999 3,150 15% discount on orders above 1,000 units 2,975 ESTRELLA is wondering if the EOQ model is still the most economical and whether increasing the order size would actually be more beneficial. Following information is relevant to forming the decision: Annual demand is 5000 units Ordering cost is $100 per order Annual holding cost is 25% How much is the EOQ for each quantity discount? How much should be the EOQ?