Princeton GI Roofing Ltd wants to reduce its total inventory cost using the appropriate EOQ model. Currently, it orders 2170 thick gauge roofing sheets per batch. Annual demand is projected to be 43420 sheets. The ordering cost is Php 120. The average carrying cost is equivalent to 20% of the unit acquisition price of Php 400. Lead time is three days. Assume a 365 day year. d. Based on the appropriate EOQ model, what should be the reorder point? Express your answer up to the nearest integer or whole number. Exclude commas and any unit of measure e.How much would the total annual inventory cost be reduced based on the results of the EOQ Model? Express your answer up to the nearest PESO f.Express the computed cost reduction in the total annual inventory cost in terms of percentage up to the nearest integer or whole number. Exclude commas and the % sign.

Princeton GI Roofing Ltd wants to reduce its total inventory cost using the appropriate EOQ model. Currently, it orders 2170 thick gauge roofing sheets per batch. Annual demand is projected to be 43420 sheets. The ordering cost is Php 120. The average carrying cost is equivalent to 20% of the unit acquisition price of Php 400. Lead time is three days. Assume a 365 day year. d. Based on the appropriate EOQ model, what should be the reorder point? Express your answer up to the nearest integer or whole number. Exclude commas and any unit of measure e.How much would the total annual inventory cost be reduced based on the results of the EOQ Model? Express your answer up to the nearest PESO f.Express the computed cost reduction in the total annual inventory cost in terms of percentage up to the nearest integer or whole number. Exclude commas and the % sign.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

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

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

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Similar questions

The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
Princeton GI Roofing Ltd wants to reduce its total inventory cost using the appropriate EOQ model. Currently, it orders 2170 thick gauge roofing sheets per batch. Annual demand is projected to be 43420 sheets. The ordering cost is Php 120. The average carrying cost is equivalent to 20% of the unit acquisition price of Php 400. Lead time is three days. Assume a 365 day year. Answer the following:a. Using the appropriate EOQ model, compute for the recommended order size. Express your answer up to the nearest hundredths (2 decimal places)b. Based on the appropriate EOQ model, when should the company place an order? Express the time interval in number of days up to the nearest hundredths (2 decimal places)/c. Based on the appropriate EOQ model, what is the company's Total Annual Inventory Cost? Express your answer up to the nearest centavo.
Bulldogs Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory carrying cost is equal to 25% of the purchase price. The lead time for placing the order is 1 week, and Bulldogs Inc. holds 4,800 litters of paint as safety stock. The company’s usage of inventory is at a constant rate. If the company orders 4,000 litters of paint per order, what is the cost of carrying inventory?
Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days, and Bulldogs Co. holds 2,400 boxes of paint as safety stock. If the company orders 2,000 boxes of chocolate per order, what is the cost of carrying inventory? A. P8,160 B. P5,280 C. P5,760 D. P2,400
Manipulation Manufacturing Company uses 1,000 units of Chip annually in its production. Order costs consist of P10 for placing a long-distance call to make the order and P40 for delivering the order by truck to the company warehouse. Each Chip costs P100 and the carrying costs are estimated at 15.625% of the inventory cost. If the EOQ for Chip is 80 and the total ordering cost is P625. Compute for the Total Carrying Costs.
Combate uses 100,000 units of Material X Annually I its production. Ordering cost consists of P1,000 for placing a long distance call o make the order and P4,000 for delivering the order to the company warehouse. Each material cost P10,000 and the carrying costs are estimated at 15.625% of the inventory cost. What is the total carrying cost?
The carrying cost curve and ordering cost curve of NEKO Inc.’s inventory intersect at 3,500 units. What is the total annual cost of inventory given that the annual demand is 75,000 units and the carrying cost per unit per year is P12
Braneast Airlines uses 500 taillight per year. Each time an order for taillights is placed, an ordering cost of $ 5 is incurred. each light costs 0.40 $ , and the holding cost is 0.08 $ per unit per year. Assume that the demand occurs at a constant rate and shortages are not allowed. What is the EOQ?
A components manufacturer uses approximately 20,000 units annually of an item. They are used at a steady rate during the 250 workdays that the plant operates. The cost of each item is $7.00, and the annual carrying cost is $0.50 per unit per year. The ordering cost is $50. What is the economic order quantity?
The Cerebro Computer Store purchase printers for $100 each. Demand for this is constant during the year, and annual demand is forecasted to be 1350 units. The holding cost is $20 per unit per year, while the cost of ordering is $90 per order. There are 270 working days per year and the lead-time is 8 days. What is the annual order cost? Enter your answer with two decimal places.
Saud Bhawan creates a demand of 10800 tires in a year. The company’s inventory carrying (holding) cost is estimated to be OMR 3 per unit per year and the ordering (setup) cost is OMR 50 per order. Calculate the Economic Order Quantity (EOQ). What is the number of orders per year? Compute the average annual setup (ordering) cost. Compute the annual average inventory. What is the average annual holding (carrying) cost? Compute the annual total cost.
All Seasons Flower Shop uses 870 clay pots a month. The pots are purchased at $ 6 each. Annual holding cost per pot is estimated to be 35% of purchase cost. Ordering cost is $ 40 per order. The shop operates 12 months in a year. What would be the difference in total cost if an order quantity of 1000 is used instead of the EOQ. Note: calculate the difference as “total cost with Q = 1000 – total cost with EOQ”.