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; andlead time averages 10 days. (Assume 250 working days per year.)a) The economic order quantity is 77 units (round your response to the nearest whole number).b) The average inventory isunits (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 $(round your response to two decimal places).f) The reorder point isunits (enter your response as a whole number).

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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 77 units (round your response to the nearest whole number). b) The average inventory is units (round your response the nearest whole number). c) The optimal number of orders per year is orders (round your response to the nearest whole number).

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 77 units (round your response to the nearest whole number). b) The average inventory is units (round your response the nearest whole number). c) The optimal number of orders per year is orders (round your response to the nearest whole number).

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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The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
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Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is $105, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is a corporate 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 and holding inventory?f. What is the total annual inventory cost, including cost of the 6,000 units?
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