M. P. VanOyen Manufacturing has gone out on bid for a regulator component Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering costis $45, and annual holding cost per unit is $6. Baker Mfg. Allen Mfg. Quantity Quantity 1-399 400-799 800+ Unit Price Unit Price 1-499 500-999 1000+ $16.00 15.50 $16.10 15.60 15.10 15.00 a) What is the economic order quantity if price is not a consideration? units (round your response to the nearest whole number).

M. P. VanOyen Manufacturing has gone out on bid for a regulator component Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering costis $45, and annual holding cost per unit is $6. Baker Mfg. Allen Mfg. Quantity Quantity 1-399 400-799 800+ Unit Price Unit Price 1-499 500-999 1000+ $16.00 15.50 $16.10 15.60 15.10 15.00 a) What is the economic order quantity if price is not a consideration? units (round your response to the nearest whole number).

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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M. P. VanOyen Manufacturing has gone out on bid fora regulator component. Expected demand is 700 units per month.The item can be purchased from either Allen Manufacturing orBaker Manufacturing. Their price lists are shown in the table.Ordering cost is $50, and annual holding cost per unit is $5.ALLEN MFG. BAKER MFG.QUANTITY UNIT PRICE QUANTITY UNIT PRICE1–499 $16.00 1–399 $16.10500–999 15.50 400–799 15.601,0001 15.00 8001 15.10a) What is the economic order quantity?b) Which supplier should be used? Why?c) What is the optimal order quantity and total annual cost ofordering, purchasing, and holding the component? PX
ABC Ltd has forecasted demand for its product ‘AB’ to be 400,000 units for the following year. The existing policy of the firm is to order 20000 units at a time and the cost per order is Rs. 1600. The holding cost per unit is Rs 20 per unit per year. The firm is now considering to use the economic order quantity model (EOQ) to determine order size of the product ‘AB’. A buffer stock of 4000 units of product ‘AB’ will be maintained by the firm, irrespective of whether order are made according to existing policy or using the EOQ model. Calculate the inventory costs of ABC Ltd based on its existing ordering policy? Calculate the inventory costs of ABC Ltd using the EOQ and advise the firm whether the EOQ is beneficial to the firm? ABC is considering to adopt the ‘Just-in-time’ approach to manage its inventories. Explain fully the conditions that are important for a firm to be able to operate with ‘ Just in time’ approach
The following table lists the demand for Betty’s Deluxe Chocolate Chip Muffins. Unsold muffins are given to a food bank with a salvage value of $1.00 per muffin. The cost is $2.50 per muffin. The muffins sell for $3.50 each. Using the single-period model, what is the optimal order quantity in number of muffins the supermarket should order? Quantity Probability Cumulative Probability 5 0.2 0.2 6 0.3 0.5 7 0.4 0.9 8 0.1 1.02.5 a. 7 b. 6 c. 5 d. 8 e. None of these are correct
Williams Inc. produces fluorescent lightbulbs for commercial use. The accounting manager isattempting to estimate the total cost for the next quarter using the high-low method. He has compileddata and found the high and low costs are $10,000 and $6,000, respectively, and the associated costdrivers are 7,000 and 3,000 packs, respectively. What is the value for b (the variable cost per unit)?What is the value for a (the fixed quantity)?
A mail-order house uses 16,870 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of BoxesPrice per Box1,000 to 1,999$1.25 2,000 to 4,9991.20 5,000 to 9,9991.15 10,000 or more1.10 a.Determine the optimal order quantity. (Round your answer to the nearest whole number.) Optimal order quantity5000 boxes b.Determine the number of orders per year. (Round your answer to 2 decimal places.) Number of order per year
ProHaul specializes in trans-American shipments for businesses through the delivery of containers. For every container the company loads on its trucks, ProHaul estimates the haul costs $1,000. In addition, containers are weighed and for each pound, there are hauling fees of $0.15. ProHaul plans to charge $0.49 per pound to his customers.Break even=2,941.17647 unitsWhat would the total revenue be for this?
A pizzeria in downtown Changloon is trying to determine the best order quantity for its pizza ingredients. The pizzeria believes it will sell 14,400 pizzas at an average price of RM8 per year. The store buys the ingredients for one pizza at a rate of RM1.50, and the storage cost for each pizza is RM0.80. The cost of ordering more ingredients is RM13. i. Determine the economic order quantity. ii. What would be the total costs for ordering the ingredients one, and five times a year?
A local outdoor vegetable stand has exactly 1,000 square feet of space to displaythree vegetables: tomatoes, lettuce, and zucchini. The appropriate data for theseitems are given in the following table.ItemTomatoes Lettuce ZucchiniAnnual demand 850 1,280 630(in pounds)Cost per pound $0.29 $0.45 $0.25The setup cost for replenishment of the vegetables is $100 in each case, and thespace consumed by each vegetable is proportional to its costs, with tomatoes requiring 0.5 square foot per pound. The annual interest rate used for computingholding costs is 25 percent. What are the optimal quantities that should be purchased of these three vegetables?
H&M’s chief demand planner has estimated that 9,250,000 units of clothing will be sold in 2021. H&M’scost of placing and processing an order is R250, while the annual cost of holding a unit in its distributioncentre is projected at 5% of the unit purchase price. Both costs are expected to be constant for theforeseeable future. On average H&M sells a unit of clothing for R300.00 at cost plus 50%. Orders arereceived two weeks after being placed with the supplier. Assume a 365-day year and that demand isconstant throughout the year.Furthermore, as part of the drive towards operational efficiency, the chief demand planner is thinkingabout using the seasonally-adjusted moving average method to forecast demand for H&M’s clothingfor the 2021 financial year. In this regard, Mrs Masuku has retrieved from the retailer’s database thefollowing information on number of clothing sold over a four–year period.Year Quarterly sales (‘000 units)Q1 Q2 Q3 Q42016 1300 1500 1200 20002017 1600…
A newspaper publisher uses roughly 800 feet of baling wire each day to secure bundles of newspapers while they are being distributed to carriers. The paper is published Monday through Saturday.Lead time is six workdays. What is the appropriate reorder point quantity, given that the companydesires a service level of 95 percent, if that stockout risk for various levels of safety stock is as follows: 1,500 feet, .10; 1,800 feet, .05; 2,100 feet, .02; and 2,400 feet, .01?
Demand for doughnut holes on Saturdays at Don’s Doughnut Shoppe is shown in the following table. Demand(dozens) RelativeFrequency Demand(dozens) RelativeFrequency 19 .02 25 .10 20 .06 26 .14 21 .17 27 .10 22 .02 28 .03 23 .14 29 .05 24 .17 a-1. Determine the optimal number of doughnut holes, in dozens, to stock if labor, materials, and overhead are estimated to be $4.80 per dozen, doughnut holes are sold for $6.40 per dozen, and leftover doughnut holes at the end of each day are sold the next day at half price. (Round your answer to the nearest whole number.) Optional number of doghnuts: ??? What is the resulting service level: ???
A single inventory item is ordered from an outside supplier. The anticipateddemand for this item over the next 12 months is 6, 12, 4, 8, 15, 25, 20, 5, 10, 20, 5,12. Current inventory of this item is 4, and ending inventory should be 8. Assume aholding cost of $1 per period and a setup cost of $40. Determine the order policyfor this item based ona. Silver–Meal.