Solve for the most economical number of units that a company should order given the following: The yearly demand for the company's product is 300,000 units with an ordering cost of $40 per order and carrying cost of $5 per unit of inventory per year.
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- A company has an annual demand of 2500 units. The cost to place an order to replenish inventory is SR18.75 per order, and annual inventory holding cost per unit is SR1.5. On average, delivery of an order takes 3 working days (Lead time). Assume the store is open 250 days per year. What is the optimal order size? What is the optimal number of orders per year? What is the optimal number of days between orders? What is the Reorder Point (ROP)? What is the Reorder Point (ROP) with 2 days safety stock.Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order? Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?The Warren W. Fisher Computer Corporation purchases 8,000transistors each year as components in minicomputers. The unit cost of each transistor is $10, and the cost of carrying one tran-sistor in inventory for a year is $3. Ordering cost is $30 per order. What are (a) the optimal order quantity, (b) the expectednumber of orders placed each year, and (c) the expected timebetween orders? Assume that Fisher operates on a 200-dayworking year.
- Consider a product with a daily demand of 500 units, a setup cost per production run of $100, a daily holding cost per unit of $0.20, and an annual production rate of 219,000 units. The firm operates and experiences demand 365 days per year. Suppose that management mistakenly used the basic EOQ model to calculate the batch size instead of using the production order quantity model. How much money per year has that mistake cost the company?JAL Trading is a Hong Kong manufacturer of electroniccomponents. During the course of a year it requires container cargo space on ships leaving Hong Kong bound forthe United States, Mexico, South America, and Canada.The company needs 280,000 cubic feet of cargo space annually. The cost of reserving cargo space is $7000 and thecost of holding cargo space is $0.80/ft3. Determine howmuch storage space the company should optimally order,the total cost, and how many times per year it should placean order to reserve spaceA car rental agency uses 96 boxes of staples a year. The boxes cost $5 each. It costs $10 to order staples, and it costs $0.80 to hold a box of staples in inventory for 1 year. A.) How many boxes of staples should the car rental company order each time it needs staples, to minimize the combined ordering and holding costs for staples? B.) Using the order size that minimizes the car rental agency’s combined ordering and holding costs for staples, how long will a single order of staples last the agency, before it must receive more staples? (Assume there are 52 weeks in the year for the car rental agency.) C.) Using the order size that minimizes the car rental agency’s combined ordering and holding costs for staples, how much does the car rental agency actually spend on holding costs for staples each year?
- A firm incurs $30 in fixed order costs per order and a holding cost per unit of $1per year. Annual demand is 10,000 units. The firm is required to order an integer multiple of500 units. What order quantity should the firm use to minimize ordering and holding costs?The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 35,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $500 per order. It costs Western $0.35 per yard annually to hold a yard of denim in inventory. Determine the optimal number of yards of denim the Western Jeans Company should order, the minimum total annual inventory cost, the optimal number of orders per year, and the optimal time between orders.You have found the EOQ for a given item. The optimal time between replenishments (T*) is 9.3 weeks. Since you have to manage many different items, you are trying to minimize costs and coordinate your orders following the Power of Two Policy. Taking this into account, which of the following statements is true? Select all correct answers You should order this item every sixteen weeks. Changing the order frequency using this policy will increase the cost by no more than 6% of the optimal Total Relevant Cost. You should order this item every eight weeks. You should order this item every six weeks. You should order this item every four weeks. None of the above.
- Annual demand of a product is 50000 units and the ordering cost is Rs 7000 per order Considering the basic economic order quantity model, the economic order quantity is 10000 units When the annual inventory cost is minimized, find out the annual inventory holding cost.A company has a chance to reduce their inventory ordering costs by placing larger quantity orders using the discount schedule below. What should their optimal order quantity be if this company purchases this single inventory item with an e-mail ordering cost of $4, an annual holding cost rate (per unit) of 2% of the price/unit, and an annual demand of 10,000 units? Order quantity (units) Price/unit ($) 0 to 2,499 1.20 2,500 to 3,999 1.00 4,000 or more 0.98In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEMNUMBER ANNUALUSAGE ITEMNUMBER ANNUALUSAGE 1 $1,900 11 $13,800 2 12,700 12 1,000 3 2,700 13 43,600 4 51,800 14 10,600 5 10,300 15 1,600 6 1,200 16 10,900 7 2,500 17 4,500 8 11,700 18 63,200 9 5,600 19 4,000 10 15,800 20 3,400 a. Classify each item in inventory using an ABC plan. item # Class (A, B, or C) 1 2 3 4 5 6 7 8 9 10