2 In the past, Taylor Industries has used a P model to manage its inventory. It takes a complete inventory count of all items each month. However,increasing labor costs are forcing Taylor to switch to ABC system to reduce the labor costs in the stockroom. Here is a sample of 20 of Taylor's items.Please classify them into ABC systems.Item NumberAnnual usage ($)Item NumberAnnual usage ($)11,5001113,000212,0001260032,2001342,0001450,000149,9009,600151,20067501610,2002,000174,000811,0001861,0009800193,5001015,000202,900Fill in the blank:If we put four items as Class A items, what are they?ItemItem, ItemItemPlease enter them in the order that their annual usage falls. If you do not put them in the right order, it will mark it as incorrect.

ABC analysis is a categorization technique in inventory management. The inventory is divided into…

Answered: In the past, Taylor Industries has used…

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...

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Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year.The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000- tires a re ordered, and $17 per tire if I ,000 or more tires areordered.a) How many tires should Rocky Mountain order each time it places an order?b) What is the total cost of this policy?
A company has an annual demand of 2500 units. The cost to place an order to replenish inventory is SR18.75 per order, and annual inventory holding cost per unit is SR1.5. On average, delivery of an order takes 3 working days (Lead time). Assume the store is open 250 days per year. What is the optimal order size? What is the optimal number of orders per year? What is the optimal number of days between orders? What is the Reorder Point (ROP)? What is the Reorder Point (ROP) with 2 days safety stock.
The inventory of Metformin 500 mg tablets is to be maintained at a minimum par level of 300 tablets and a maximum par level of 1000 tablets. If 320 tablets are left on the shelf at the end of the day, how many bottles will you order to meet the inventory minimum? Metformin is available in package sizes containing 500-count and 1000-count. Group of answer choices 1 bottle of 500-count None, current inventory is less than the par level 1 bottle of 1000-count None, current inventory is greater than the par level
Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order? Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?
Consider a product with a daily demand of 500 units, a setup cost per production run of $100, a daily holding cost per unit of $0.20, and an annual production rate of 219,000 units. The firm operates and experiences demand 365 days per year. Suppose that management mistakenly used the basic EOQ model to calculate the batch size instead of using the production order quantity model. How much money per year has that mistake cost the company?
____ is the ordering model which calculates the timing of the inventory order:Select one:a. ABC modelb. Fixed order quantity modelc. EOQ model d. Reorder point model
Vetox sells industrial chemicals. One of their inputs can be purchased in either jugs orbarrels. A jug contains one gallon, while a barrel contains 55 gallons. The price pergallon is the same with either container. Vetox is charged a fixed amount per orderwhether it purchases jugs or barrels. The inventory holding cost per gallon per monthis the same with either jugs or barrels. Vetox chooses an order quantity to minimizeordering and holding costs per year. Would Vetox purchase a greater number of gallonswith each order if it purchased with jugs or with barrels?a. They would order a greater number of gallons with barrels.b. They would order the same number of gallons with either container.c. They would order a greater number of gallons with jugs.d. They might order a greater number of gallons with jugs or with barrels, depending onvarious factors like the demand rate, ordering cost, and holding cost.
World’s Greatest Coffee EOQ Problem A natural food store carries a brand of coffee called World’s Greatest Coffee. The following data shouldbe used in your calculations.Demand/Sales = 10 cases of coffee per week (you will need to convert this to an annual amount)Ordering Cost = $12 per orderCarrying Charge = 18% per yearUnit Cost = $75 per case Answer the following questions and be sure to show your computations. You can use whatever symbolyou need for square root, if typing in Word.1. How many cases should be ordered at a time? (This number will be the EOQ)2. How often should the coffee be ordered?3. What is the annual cost or ordering the coffee? What is the annual cost of carrying the coffee?And what is the total cost (ordering and carrying costs added together)?4. Name three reasons or factors that might cause the firm to order a larger or smaller amountthan the EOQ. Scoring – 20 possible pointsSection Possible PointsQuestion 1 – EOQ computation 4Question 2 – Frequency of…
Southern Markets, Inc. is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? b. The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.
A drill in a hardware store incurs a holding cost per unit of $10 per year. The storesells one of these drills per week all year long. Each time the store orders more drills, it ordersa case that contains 12 drills. What is the average inventory of drills at this hardware store?
In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEMNUMBER ANNUALUSAGE ITEMNUMBER ANNUALUSAGE 1 $1,900 11 $13,800 2 12,700 12 1,000 3 2,700 13 43,600 4 51,800 14 10,600 5 10,300 15 1,600 6 1,200 16 10,900 7 2,500 17 4,500 8 11,700 18 63,200 9 5,600 19 4,000 10 15,800 20 3,400 a. Classify each item in inventory using an ABC plan. item # Class (A, B, or C) 1 2 3 4 5 6 7 8 9 10
Alpha Products, Inc., is having a problem trying to control inventory. There is insufficient time to devote to all its items equally. The following is a sample of some items stocked, along with the annual usage of each item expressed in dollar volume. ITEM ANNUAL DOLLAR USAGE ITEM ANNUAL DOLLAR USAGE a S 30, 100 k S 1,700 b 27,000 120,000 c 93,000 m 111,000 d 1,400 n 3,000 e 1,800 o 500 f 30,000 p 114, 000 g 1,600 q 2,600 h 2,500 г 28,000 i 3, 200 s 2, 800 j 1,500 t 3, 100 a. Suggest a system for allocating control time? multiple choice ABC analysis Cycle counting b. Specify where each item from the list would be placed.

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