Please solve all within 30 minutes. Sam's Cat Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. If purchases kitty itter for $13.00 per bag. The following information is available about these bage>Demand 70 bags/weekOrder cost $52.00/order>Annual holding cost 20 percent of cost>Desired cycle service level 80 percentLead time 4 weeks (24 working days)>Standard deviation of weekly demand=15 bage>Current on-hand inventory is 320 bags, with no open orders or backorders& Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast enor?The costs will be higher owing to the error in EOQ (Enter your response rounded to two decimal places)

Inventory refers to the raw material that is used in the production of the goods. Inventory is the…

& Suppose that the weekly demand forecast of 70 bags is incomect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this foreca The costs will be higher owing to the enor in EOQ Enter your response rounded to two decimal places)

& Suppose that the weekly demand forecast of 70 bags is incomect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this foreca The costs will be higher owing to the enor in EOQ Enter your response rounded to two decimal places)

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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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…
Pet Empire 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 is 90 bags per week, order cost is $54 per order, annual holding cost is 27% of the cost, service level is 80%, lead time is 3 weeks (18 working days), and standard deviation of weekly demand is 15 bags. Current on hand inventory is 320 bags with no open orders or back orders. Require to calculate Economic Order Quantity (EOQ). What would be the average time between orders (in weeks)? Calculate reorder point (R). The store currently uses a lot size of 500 bags (i.e., Q = 500). Calculate the annual holding cost of this policy and also annual ordering cost. Without calculating the EOQ, how can you conclude from these two calculation that the current lot size is too large? What would be the annual cost saved by shifting from the 500-bag lot size to the EOQ? Consider again the…
Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,and uses a continuous review inventory system. It purchaseskitty litter for $10.75 per bag. The following information isavailable about these bags.Demand = 95 bags>weekOrder cost = $58>orderAnnual holding cost = 25 percent of costDesired cycle@service level = 90 percentLead time = 4 weeks 128 working days2Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 315 bags, with no open ordersor backorders.a. What is the EOQ? What would be the average time betweenorders (in weeks)?b. What should R be?c. An inventory withdrawal of 10 bags was just made. Is ittime to reorder?d. The store currently uses a lot size of 490 bags (i.e.,Q = 490). What is the annual holding cost of this policy?Annual ordering cost? Without calculating the EOQ, howcan you conclude from these two calculations that thecurrent lot size is too large?e. What would be the annual cost saved by shifting from the490-bag lot size to the EOQ?
Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,and uses a continuous review inventory system. It purchaseskitty litter for $10.75 per bag. The following information isavailable about these bags.Demand = 95 bags>weekOrder cost = $58>orderAnnual holding cost = 25 percent of costDesired cycle@service level = 90 percentLead time = 4 weeks 128 working days2Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 315 bags, with no open ordersor backorders. a. Suppose that the weekly demand forecast of 95 bags isincorrect and actual demand averages only 65 bags perweek. How much higher will total costs be, owing to thedistorted EOQ caused by this forecast error?b. Suppose that actual demand is 65 bags but that orderingcosts are cut to only $10 by using the Internet to automateorder placing. However, the buyer does not tell anyone,and the EOQ is not adjusted to reflect this reduction in S.How much higher will total costs be, compared to whatthey could be if…
Arthur Meiners is the production manager for Wheel-Rite, a small manufacturer of metal parts. Wheel-Rite sells 10,378 gear wheels each year. Wheel-Rite setup cost is $45 and maintenance cost is $0.60 per sprocket per year. Wheel-Rite can produce 493 gear wheels per day. The daily demand for the gear wheels is 51 units. Show your work. 1. What inventory management model should we use to solve this problem? Model for discount purchases Model Economic Quantity to Order Model Economic Quantity to Produce Model to handle dependent demand 2. What is the optimal amount of production? Response 3. What is the maximum inventory level of gear wheels that will be in the Wheel-Rite warehouse? Response 4. What is Wheel-Rite's annual setup cost? Response 5. What is the annual cost of maintaining Wheel-Rite? Response
Golden Crust Bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags ayear. Preparing an order and receiving a shipment of flour involves a cost of $10 per order.Annual holding costs are $75 per bag. Once an order for flour is placed, it takes six (6) days toreceive the order from the flour factory. The bakery operates 350 days per year.Calculate the following:(i) Economic Order Quantity(ii) Expected number of orders (Order Frequency)(iii) Average inventory(iv) The annual holding cost(v) The annual ordering cost(vi) The total annual cost of inventory management(vii) Reorder point(viii) If holding costs were to increase by $9 per year, how much would thataffect the minimum total annual cost?
Your objective is to help company by determining EOQ* (Economic Order Quantity) that minimizes the totalinventory cost for a company that sells ceiling fans. Your worksheet provides information about the currentorder quantity, demand quantity and other costs.Questions: Answer A and Ba. With the current order quantity, what is the total cost of inventory?b. Implement the problem in Excel and find the order quantity (EOQ) (round to nearest integer) that givesminimum inventory cost. Note: this is a Non-linear programming, hence select “GRG Nonlinear” method inSolver- How much money would company save by switching to optimum quantity from current orderquantity?
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: ≻Demand=75 bags/week ≻Order cost=$55.00/order ≻Annual holding cost=25 percent of cost ≻Desired cycle-service level=80 percent ≻Lead time=4 weeks (24 working days) ≻Standard deviation of weekly demand=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 $enter your response here higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) a. What is the EOQ? What would the average time between orders (in weeks)? b. What should R be? c. An inventory withdraw…
Sam’s Auto Shop services and repairs a particular brand offoreign automobile. Sam uses oil fi lters throughout the year. Th eshop operates 52 weeks per year, and weekly demand is 150 fi lters.Sam estimates that it costs $20 to place an order and his annualholding cost rate is $3 per oil fi lter. Currently, Sam orders inquantities of 650 fi lters. Calculate the total annual costs associatedwith Sam’s current ordering policy.
Petromax Enterprises uses a continuous review inventorycontrol system for one of its SKUs. The following informationis available on the item. The firm operates 50 weeks in a year.Demand = 50,000 units>yearOrdering cost = $35>orderHolding cost = $2>unit>yearAverage lead time = 3 weeksStandard deviation of weekly demand = 125 unitsa. What is the economic order quantity for this item?b. If Petromax wants to provide a 90 percent cycle-servicelevel, what should be the safety stock and the reorder point?
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.)
A contractor buys cement in 25-pound bags. The contractor uses 1,440 bags a year. Ordering cost is $15 per order. Annual carrying cost is $75 per bag. 1-Determine the economic order quantity. ____bages 2-What is the average number of bags on hand? 3-How many orders per year will there be? 4-Compute the total cost of ordering and carrying cement. 5-If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? Increase by