Demand for an item is 3650 units per year. Each unit costs $20 and each orderplaced costs $10. Annual inventory holding costs are 10% of the item cost. You areusing a fixed order quantity method, and assume all the assumptions needed forEOQ are met. The lead time is 2 days. At what level of inventory (R) should youplace your next order?20103650191

The question is related to Inventory Management. The Economic Order Quantity is that level of…

Answered: Demand for an item is 3650 units per…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

Custom Computers, Inc. assembles custom home computersystems. Th e heat sinks needed are bought for $12 each and areordered in quantities of 1300 units. Annual demand is 5200 heatsinks, the annual inventory holding cost rate is $3 per unit, andthe cost to place an order is estimated to be $50. Calculate thefollowing:(a) Average inventory level(b) Th e number of orders placed per year(c) Th e total annual inventory holding cost(d) Th e total annual ordering cost(e) Th e total annual cost
A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 20 cans per day. Inventory holding costs are $0.50 per can per year. Ordering costs are $10 per order. The lead time is two weeks. Backorders are not practical— the motorist drives away.a. Based on these data, choose the appropriate inventory model and calculate the economic order quantity and reorder point. Describe in a sentence how the plan would work. Hint: Assume demand is deterministic.b. The boss is concerned about this model because the demand really varies. The standarddeviation of demand was determined from a data sample to be 6.15 cans per day. Themanager wants a 99.5 percent service probability. Determine a new inventory planbased on this information and the data in part (a). Use Qopt from part (a).
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?
Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for $12 each and are ordered in quantities of 1300 units. Annual demand is 5200 heat sinks, the annual inventory holding cost rate is $3 per unit, and the cost to place an order is estimated to be $50. Calculate the following: (a) Average inventory level (b) The number of orders placed per year (c) The total annual inventory holding cost (d) The total annual ordering cost (e) The total annual cost
i need D) The demand for a certain article is 400 art/month. The ordering cost is $35 and the storage cost is $10/month. The purchase cost is $15 but if 70 items or more are purchased there is a discount andThey drop at $10. a) Obtain the optimal amount of inventory Yb) Obtain the total cost of inventoryc) Is it convenient to accept the discount?d) What is the cost of inventory with quantity m?
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 50 cars per month. The cars cost $80 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. (a)Determine the economic order quantity and total annual cost (in $) under the assumption that no backorders are permitted. (Round your answers to two decimal places.) Q*=TC=$ (b)Using a $45 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost (in $) for the model racing cars. (Round your answers to two decimal places.) Q*=TC=$ (c)What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop is open for business 300 days per year. (Round your answer to two decimal places.) days (d)Would you recommend a no-backorder or a backorder inventory policy for this…
The demand rate for a product is 100 units per month. Each time an order is placed, a fixed cost of $40 is incurred. The purchase price for the product is $12 and its selling price is $20. The inventory holding cost rate is 20% per year. If the order lead time is 4 months, what is the reorder level of the (s, Q) policy?
Solve step by step, do calculations manually not in software The demand for a certain article is 400 art/month. The ordering cost is $35 and the storage cost is $10/month. The purchase cost is $15 but if 70 items or more are purchased there is a discount andThey drop at $10. a) Obtain the optimal amount of inventory Yb) Obtain the total cost of inventoryc) Is it convenient to accept the discount?d) What is the cost of inventory with quantity m? Solve step by step, do calculations manually not in software
The demand for a commodity is 40,000 units a year, at a steady rate. It costs $20 to place an order, and $0.40 to hold a unit for a year. Find the order size to minimize inventory costs, the number of orders placed each year, the length of the inventory cycle and the total costs of holding inventory for the year. What is the EOQ? What is the number of orders placed each year? What is the inventory cycle (length of time that the the order size will last)? in terms of weeks What is the total ordering & carrying costs at the EOQ level?
Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. What is the average inventory level, assuming that the minimum inventory level is zero? 2.Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.
Your firm uses a continuous review system and operates 52 weeks per year. One of the Stock-Keeping Units (SKUs) has the following characteristics:Demand = 20000 units/year = 385 units/weekOrdering cost = $40/orderHolding cost = $2/unit/yearService level = 95 percentz=1.65Lead time = 2 weeksDemand is normally distributed, with a standard deviation of weekly demand of 100 units. a)Calculate the item's EOQ. b)Find the safety stock and reorder point that provide a 95 percent service level. c)For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders?
Daily demand for a certain product is normally distributed with a mean of 100 and a standarddeviation of 15. The supplier is reliable and maintains a constant lead time of 5 days.The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit peryear. There are no stockout costs, and uni lled orders are i lled as soon as the order arrives.Assume sales occur over 360 days of the year.Your goal here is to i nd the order quantity and reorder point to satisfy a 90 percentprobability of not stocking out during the lead time.a. What type of system is the company using?b. Find the order quantity.c. Find the reorder point.

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS