Atech Service sells professional cleaning machines and scouring agents. They deliver the scouring agents to customers on a fixed weekly schedule. The annual demand is 1500 bottles; each with a value of $10. The fixed cost for each order placed at the supplier is $100. The lead-time is 2 weeks. a) Assuming that the holding cost is $10/year and bottle, calculate the economical ordersize? b) Calculate the reorder point

Atech Service sells professional cleaning machines and scouring agents. They deliver the scouring agents to customers on a fixed weekly schedule. The annual demand is 1500 bottles; each with a value of $10. The fixed cost for each order placed at the supplier is $100. The lead-time is 2 weeks. a) Assuming that the holding cost is $10/year and bottle, calculate the economical ordersize? b) Calculate the reorder point

Name: Atech Service sells professional cleaning machines and scouring agents
Uploaded: 2024-03-20T06:57:05.000Z
Channel: Bartleby
Description: Atech Service sells professional cleaning machines and scouring agents. They deliver the scouring agents to customers on a fixed weekly schedule. The annual demand is 1500 bottles; each with a value of $10. The fixed cost for each order placed at the

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...

See similar textbooks

Similar questions

A producer of tires has an annual demand for a specific brand of tire. Theannual demand is 14,000. The cost of ordering these tires for the distributioncenter for each order is $1,200 per order. The annual holding cost is $8.50 pertire per year (in U.S. dollars): (In Excel with formulas)a What is the EOQ and the total annual cost at EOQ?b If the company decides to place more frequent orders, then theordering cost would increase to $1,800 per order. Nevertheless, the increasedfrequency of orders would decrease the annual holding cost to $6.50 per tireper year. Should the distribution center order tires more frequently?
Tacky Souvenirs sells lovely handmade tablecloths at its islandstore. These tablecloths cost Tacky $15 each. Customers wantto buy the tablecloths at a rate of 240 per week. The companyoperates 52 weeks per year. Tacky, the owner, estimates hisordering cost at $50. Annual holding costs are 20 percent of theunit cost. Lead time is 2 weeks. Using the information given,(a) Calculate the economic order quantity.(b) Calculate the total annual costs using the EOQ.(c) Determine the reorder point.
The Farmer’s Wife is a country store specializing in knickknacks suitable for a farm-house décor. One item experiencing a considerable buying frenzy is a miniature Holstein cow. Average weekly demand is 30 cows, with a standard deviation of 5 cows. The cost to place a replenishment order is $15 and the holding cost is $0.75/cow/year. The supplier, however, is inChina. The lead time for new orders is 8 weeks, with a standard deviation of 2 weeks. The Farmer’s Wife, which is open only 50 weeks a year, wants to develop a continuous review inventory system for this item with a cycle-service level of 90 percent.a. Specify the continuous review system for the cows. Explain how it would work in practice.b. What is the total annual cost for the system you developed?
Please complete the problem usinf EXCEL, Show ALL formulas Demand for a popular athletic shoe is nearly constant at 800 pairs per week for a regional division of a national retailer. The cost per pair is $54. It costs $72 to place an order, and annual holding costs are charged at 22% of the cost per unit. The lead time is two weeks. a. What is the EOQ? b. What is the reorder point? c. What is the cycle time? d. What is the total annual cost?
ABC Ltd. manufactures product P and delivers to its 16 retailer stores. Annual demand for P at each retail store is 100,000 units. ABC uses its own trucks for delivery and a truck has the capacity for 50,000 units. The truck costs $3,000 per load and $300 per delivery. The inventory holding cost at the retailer is 15% of the unit cost of P. Cost of a P is $20. Find the annual cost (inventory cost + transportation cost) of the supply chain network if milk runs of size 4 is used milk runs of size 8 is used
MGR Corporation sells table napkins. These are sold by dozen per package for Php 20. They sell 2,000 packages per month. Each package sells at Php 10 and requires 6 days lead time from date of order to date of delivery. The ordering cost is at Php 1.20 and the carrying cost is 10% per annum. Find the following: a) EOQ b) The number of orders per year c) The total cost of buying and carrying the table napkins for the year d) Assuming that the present inventory level is 200 packages and there is no safety stock, when is the next order placed (use 360 days/year)
gainesvile cigar stocks cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars. a) for a 90% of service level, what is the rop?
The weekly demand for special chocolate box is 412 units. The chocolate is sold for 52 weeks in a year. The fixed ordering cost for placing an order with the German supplier is 238 dollars. Each chocolate box costs 16 dollars and the holding cost is 25% of the items cost per year. What is the economic order quantity (optimal quantity) to order from the supplier each time? Enter your answer rounded to 2 decimal places.
Rafiki Bar uses 10,000 cases of millet beer monthly. One case costs Shs.5,000. Holding cost is 30% of the cost of a case p.a while ordering cost is Shs.100,000 per order. The firm works 360 days in a year while lead time is 6 days. Required: ii. Determine the days between orders and the reorder point iii. Determine the total cost of the inventory policy iv. Suppose actual holding cost turns out to be 15% instead of 30% and the inventory policy above is implemented for a year, determine the cost of prediction error if every other parameter estimate turns out as predicted.
A local supermarket sells a popular brand of shampoo at a fairly steady rate of 380 bottles per month. The cost of each bottle to the supermarket is 45 cents, and the cost ofplacing an order has been estimated at $8.50. Assume that holding costs are based ona 25 percent annual interest rate. Stock-outs of the shampoo are not allowed.b. If the procurement lead time is two months, find the reorder point based on the onhand inventory
Rapallo Sneakers, Inc. sells a pair of LG sneakers for $42. Due to the recent fitness craze, these shoes are in high demand: 52 pairs of shoes are sold per week. The ordering cost is $42 per order, and the annual holding cost is 25 percent of the selling price. If the store operates 48 weeks a year, what can you say about the size of the current order quantity of 225 pairs?
The following information relates to Unique Ltd for the year 2020: Annual Demand 408,375 unitsAnnual cost of Holding $1.50Annual cost of placing an order $500 (i) Calculate the EOQ (ii) Calculate the average inventory (iii) Calculate the total annual ordering cost (iv) Calculate the total annual inventory cost (excluding the purchase cost)