RCR Company has a secret ingredient in its production. This ingredient costs the company P60 each from the supplier and requires 5-day lead time. The ordering cost is P25 per order and the carrying cost per unit is 10% of purchase price. (EOQ is 2,400 units). Use 360 days. Determine the following: a. Annual demand

RCR Company has a secret ingredient in its production. This ingredient costs the company P60 each from the supplier and requires 5-day lead time. The ordering cost is P25 per order and the carrying cost per unit is 10% of purchase price. (EOQ is 2,400 units). Use 360 days. Determine the following: a. Annual demand

Name: RCR Company has a secret ingredient in its production. This ingredient
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Description: RCR Company has a secret ingredient in its production. This ingredient costs the company P60 each from the supplier and requires 5-day lead time. The ordering cost is P25 per order and the carrying cost per unit is 10% of purchase price. (EOQ is 2,40

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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Bart’s Barometer Business (BBB) is a retail outlet that deals exclusively with weather equipment. Currently BBB is trying to decide on an inventory and reorder policy for home barometers. These cost BBB $60 each and demand is about 1200 per year distributed fairly evenly throughout the year. Reordering costs are $50 per order and holding costs are figured at 20% of the cost of the item. BBB is open 300 days a year (6 days a week and closed two weeks in August). Lead time is 60 working days. Develop a total cost model for this system. What is the economic order quantity? What is the cycle time? What is the reorder policy for BBB? What total annual cost does the model give?
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