M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors intorefrigerators and other home appliances. One of the components has an annual demand of 260 units, and this isconstant throughout the year. Carrying cost is estimated to be $1.00 per unit per year, and the ordering (setup) cost is$21 per order.a) To minimize cost, how many units should be ordered each time an order is placed? 104.50 units (round yourresponse to two decimal places)b) How many orders per year are needed with the optimal policy?places)orders (round your response to two decimal

Annual Demand of the component = D = 260 units Carrying Cost per unit per year = Cc = $1.00 Ordering…

Answered: M. Cotteleer Electronics supplies…

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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M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 255 units, and this is constant throughout the year. Carrying cost is estimated to be $0.50 per unit per year, and the ordering (setup) cost is $19 per order. a) To minimize cost, how many units should be ordered each time an order is placed?units (round your response to two decimal places).
M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of Cotteleer’s components has an annual demand of 265 units, which is constant throughout the year. The carrying cost is estimated to be $1.25 per unit per year, and the ordering cost is $19 per order. Please show your work for full points. (a) To minimize cost, how many units should be ordered each time an order is placed? (b) How many orders are needed per year with the optimal policy? (c) What is the total annual cost of ordering and holding inventory? undefined
M. Cotteleer Electronics supplies microcomputercircuitry to a company that incorporates microprocessors intorefrigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant through-out the year. Carrying cost is estimated to be $1 per unit per year, and the ordering (setup) cost is $20 per order.a) To minimize cost, how many units should be ordered eachtime an order is placed?b) How many orders per year are needed with the optimal policy?c) What is the average inventory if costs are minimized?d) Suppose that the ordering (setup) cost is not $20, and Cotteleerhas been ordering 150 units each time an order is placed. Forthis order policy (of Q 5 150) to be optimal, determine whatthe ordering (setup) cost would have to be.
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.50 per stone for quantities of 600 stones ore more, $8.90 per stone for orders of 400 to 599 stones, and $9.40 per stone for lesser quantities. The jewelry firm operates 104 days per year. Usage rate is 22 stones per day, and ordering costs are $42. Do not round intermediate calculations. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. b. If annual carrying costs are 24 percent of unit cos, what is the optimal order size? c. If lead time is 3 working days, at which point should the company reorder?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.70 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $10.00 per stone for lesser quantities. The jewelry firm operates 109 days per year. Usage rate is 25 stones per day, and ordering costs are $48. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) b. If annual carrying costs are 29 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a priceof $8 per stone for quantities of 600 stones or more, $9 per stone for orders of 400 to 599 stones,and $10 per stone for lesser quantities. The jewelry firm operates 200 days per year. Usage rate is25 stones per day, and ordering costs are $48.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize totalannual cost.b. If annual carrying costs are 30 percent of unit cost, what is the optimal order size?c. If lead time is six working days, at what point should the company reorder?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $9.70 per stone for lesser quantities. The jewelry firm operates 230 days per year. Usage rate is 16 stones per day, and ordering costs are $45.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do…
The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels of wheat annually. The wheat must be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500, are P5,000 per order. Annual carrying costs are 2 percent of the purchase price of P5 per bushel. The company maintains a safety stock of 200,000 bushels. The delivery time is 6 weeks. 1. What is the EOQ? 2. At what inventory level should an order be placed to prevent having to draw on the safety stock? 3. What are the total inventory costs, including the costs of carrying the safety stock? 4. The wheat processor agrees to pay the elevator removal charges if Strawberry Bread will purchase wheat in quantities of 650,000 bushels. Would it be to Strawberry Bread’s advantage to order under this alternative?
Wood County Hospital consumes 1,000 boxes of bandagesper week. The price of bandages is $35 per box, and thehospital operates 52 weeks per year. The cost of processingan order is $15, and the cost of holding one box for a year is15 percent of the value of the material.a. The hospital orders bandages in lot sizes of 900 boxes.What extra cost does the hospital incur, which it couldsave by using the EOQ method?b. Demand is normally distributed, with a standard devia-tion of weekly demand of 100 boxes. The lead time is2 weeks. What safety stock is necessary if the hospital usesa continuous review system and a 97 percent cycle-servicelevel is desired? What should be the reorder point?c. If the hospital uses a periodic review system, with P = 2weeks, what should be the target inventory level, T?
Meena Distributors has an annual demand for an airport metal detector of 1,420 units. The cost of a typical detector to Meena is $400. Carrying cost is estimated to be 19% of the unit cost, and the ordering cost is $25 per order. If Purushottama Meena, the owner, orders in quantities of 300 or more, he can get a 4% discount on the cost of the detectors. Should Meena take the quantity discount? Part 2 What is the EOQ without the discount? EOQ = enter your response here units (round your response to one decimal place). Part 3 Since the total cost with the discount is ▼ greater than less than the total cost without the discount, Meena ▼ should should not order 300 units at a time in order to qualify for the discount.
Thomas Kratzer is tbe purchasing manager for theheadquarters of a la rge insurance company chain with a centralinventory operation. Thomas's fas test-moving inventory itemhas a demand of 6,000 units per year. The cost of each unit is$ 100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for anorder to arrive, and the demand for I week is 120 units. (This is acorporate operation, and there are 250 working days per year.)a) What is the EOQ?b) What is the average inventory if the EOQ is used?c) What is the optimal number of orders per yea r?d) What is the optimal number of days in between any two orders?e) What is the annual cost of ordering and holding inventory?f) What is the total annual inventory cost, including the cost ofthe 6,000 units?
Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers. The carrying cost per skull per year is estimated to be $150.00 and the fixed order cost is $96. What is the economic order quantity (EOQ)? (Round to the nearest whole number.)

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