Rick Jerz is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is 5,000 units; carrying cost is $50 per unit per year; order costs for his company typically run nearly$30 per order; and lead time averages 10 days. (Assume 250 working days per year.)a) The economic order quantity is units (round your response to the nearest whole number).b) The average inventory is units (round your response to the nearest whole number).c) The optimal number of orders per year isorders (round your response to the nearest whole number).d) The optimal number of working days between orders isdays (round your response to two decimal places).e) The total annual inventory cost (carrying cost + ordering cost) is S (round your response to two decimal places).f) The reorder point isunits (enter your response as a whole number).

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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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Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 94.41% cycle service level. Demand averages 415 units per day, and the standard deviation of demand per day is 105 units. Lead time is 12 days (round Z-values, standard deviations to two decimal places). Question content area bottom Part 1 a. How many units of safety stock should be held? enter your response here units (round your response to the nearest integer). b. What should the target inventory level (order-up-to level) be? enter your response here units (round your response to the nearest integer). c. Suppose that it is time to review the item. There are 152 units in inventory, and there is an outstanding backorder for 455 units. An order for 129 units is on the way. How many units should be ordered now? enter your response here units (round your response to the nearest integer).
NEED ALL THREE QUESTIONS Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2,700 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $9 per unit of average inventory. Every time an order is placed for more item X, it costs $6. a. Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.) b. What is the annual cost for ordering item X? (Round your answer to 2 decimal places.) c. What is the annual cost for storing item X? (Round your answer to 2 decimal places.)
The weekly demand for a product is 770 units. The standard deviation of daily demand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock: How many days would be the lead time? (Whole number, no space, no decimal value)
The weekly demand for a product is 770 units. The standard deviation of daily demand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock: What’s the product’s inventory status?(Whole number, no space, no decimal value)
Thomas Kratzer is the purchasing manager for theheadquarters of a large insurance company chain with a centralinventory operation. Thomas’s fastest-moving inventory item hasa 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 aver-age ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 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 year?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?
Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 36 units per day Average lead time = 50 days Item unit cost = $70 for orders of less than 400 units Item unit cost = $68 for orders of 400 units or more Ordering cost = $45 Inventory carrying cost = 25% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time. Calculate EOQ if unit cost is $70 and $68. (Note: These EOQs do not need to be feasible in theirprice range.) (Round up your answers to the next whole number.) EOQ Unit cost at $70 units Unit cost at $68 units Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Annual Ordering Cost Unit cost at $70 Unit…
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 112, 500 units per year, an ordering cost of $3 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? d. What is the total cost of ordering and carrying inventory?
Items purchased from a vendor cost $250 each, and the forecast for next year’s demand is 2,000 units. The optimal order size is 100. The firm operates 52 weeks next year and lead time is 3 weeks. It costs $5 every time an order is placed for more units, and the storage cost is $2 per unit per year. What is the number of orders per year? a.35 b.20 c.22 d.25 e.5
Daily demand for a product is 50 units, with a standard deviation of 35 units. The review period is 5 days and the lead time is 4 days. At the time of review, there are 60 units in stock. If 95 percent service probability is desired, how many units should be ordered? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)
I need help. It is due today. The answer for question b, 465 units is false/not correct The two images are the examples on how to solve the problem. 1. Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 52 weeks in a year. Refer to the standard normal table for z-values. ≻Demand = 78,000 units/year ≻Ordering cost = $30.00/order ≻Holding cost = $3.00/unit/year ≻Average lead time = 1 week ≻Standard deviation of weekly demand = 200 units The answer for a is: a. The economic order quantity for this item is 1249 units.(Enter your response rounded to the nearest whole number.) FIND b, please b. If Petromax wants to provide a 98% service level, the safety stock is "what?" units (enter your response rounded to the nearest whole number)
A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls. Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days. 1. What would have been the desired service level if an order quantity of 142 rolls were placed when the stock on hand is 30 rolls? (Assume: amount on order and backorder is zero). * 2. How many units would be the safety stock? *

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