Colours Galore buys a standard type of paint in 50 litres containers at a price of R800 per container and 19200 of these containers are used each year. The stock controller estimates that the cost of placing and receiving a order is R450. The controller's estimate of the annual cost of carryinh this product is R6 per container. Suppose Colour Galore were to order 800 containers per order placed during the year. Calculate the avergare inventory and the annual holding cost
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Colours Galore buys a standard type of paint in 50 litres containers at a price of R800 per container and 19200 of these containers are used each year. The stock controller estimates that the cost of placing and receiving a order is R450. The controller's estimate of the annual cost of carryinh this product is R6 per container. Suppose Colour Galore were to order 800 containers per order placed during the year.
Calculate the avergare inventory and the annual holding cost
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- Colours Galore buys a standard type of paint in 50 litres containers at a price of R800 per container and 19200 of these containers are used each year. The stock controller estimates that the cost of placing and receiving a order is R450. The controller's estimate of the annual cost of carrying this product is R6 per container. Suppose Colour Galore were to order 800 containers per order placed during the year. Calculate the avergare inventory and the annual holding cost as well as calculate the total annual cost of inventory and economic order quantityThe Swedish company Rossons Sport sells skis endski-equipment. They purchase skis at a price of $260 per pair andsales price is $420. Skis not sold this season can be sold early nextseason at a discounted price, $200. In addition they estimate thestock holding cost between seasons to be $25 per pair of skis.Past sales shows that demand per season is normal distributedwith a mean of 459 pairs and a standard deviation of 56.a) Calculate the shortage and overage cost per pairb) Advice Rossons Sport how many pair of skis they should purchasec) What is the service level?An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?
- An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?What quantity discount should the manufacturer offer the retailer in order to minimize the total supplychain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does theretailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODELVallie Enterprise sells a product that cost $200 per unit and has a monthly demand of 500 units. The annual holding cost per unit is calculated as 2% of the unit purchase price. It costs the business $30 to place a single order. The maximum number of units sold for any one week is 150 and minimum sales 80 units. The vendor takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. The EOQ model is appropriate. i) What is the cost minimizing solution for this product each year? ii) Determine the re-order level, minimum inventory level and maximum inventory level for the product.A Mercedes dealer purchases vehicles for $20,000. The annual holding cost is estimated to be 25% of the dollar value of inventory. The dealer sells an average of 500 cars per year. He believes that demand is backlogged, but estimates that if he is short one car for one year, he will lose $20,000 in future profits. Each time the dealer places an order for cars, the ordering cost amounts to $10,000. What is the (s, Q) ordering policy that results in a 90% CSL?
- Chris usually sells 120 copies of newspaper each day and believe that sale are normally distributed, with a standard deviation of 15 papers. He pays 70 cents for each paper, which sells $1.25. For each unsold paper, he receives 30-cent credit. a) determine how many papers he should order each day b) calculate the stockout risk for that quantity.A Mercedes dealer must pay $20,000 for each carpurchased. The annual holding cost is estimated to be 25%of the dollar value of inventory. The dealer sells an averageof 500 cars per year. He believes that demand is backloggedbut estimates that if he is short one car for one year he willlose $20,000 worth of future profits. Each time the dealerplaces an order for cars, ordering cost amounts to $10,000.Determine the Mercedes dealer’s optimal ordering policy.What is the maximum shortage that will occur?Consider a hardware supply warehouse that is contractually obligated to deliver 1000units a specialized fastener to a local manufaturing company each week. Each time thewarehouse places an order for these items from its supplier, an ordering and transporationfee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener andcharges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventoryvalue, or $0.25 per year. The warehouse manager would like to know how much to orderwhen inventory gets to zero.Assume that the warehouse works 50 weeks/year.
- ABC firm uses roughly 3,400 pounds of chemical dye a year. Currently, the firm purchases 300 pounds per order and pays P120.00 per pound. The supplier has just announced that orders of 1,000 pounds or more will be filled at a price of P80.00 per pound. The manufacturing firm incurs a cost of P4,000.00 each time it submits an order and assigns an annual holding cost of 17% of the purchase price per pound. a. Determine the order size that will minimize the total cost.b. If the supplier offered the discount at 1,500 pounds instead of 1,000 pounds, what order size would minimize total cost?An automotive warehouse stocks a variety of parts that are sold at neighborhood stores. One particular part, a popular brand of oil filter, is purchased by the warehouse for $1.50 each. It is estimated that the cost of order processing and reciept is a $100 per order. The company uses an inventory carrying charge based on 28 percent annual interest rate. The monthly demand for the filters follows a normal distribution with mean 280 and a standard deviation 77. Order lead time is assumed to be 5 months. Assume that if a filter is demanded when the warehouse is out of stock, then the demand is back-ordered and the cost assessed for each back-ordered demand is $12.80. Determine the following quantities: a. The optimal values of the order quantity and the reorder level. b. The average annual cost of holding, setup, and stock-out associated with this item assuming that an optimal policy is used. c. Evaluate the cost of uncertanity for this process. That is, compare the average annual cost…Nationwide Auto Parts uses a periodic review inventory control system for one of its stock items. The review interval is 6 weeks, and the lead time for receiving the materials ordered from its wholesaler is 3 weeks. Weekly demand is normally distributed, with a mean of 100 units and a standard deviation of 20 units.a. What is the average and the standard deviation of demand during the protection interval?b. What should be the target inventory level if the firm desires 97.5 percent stockout protection?c. If 350 units were in stock at the time of a periodic review, how many units should be ordered?