Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 14,100 units. Southeastern estimates its annual holding cost for this item to be $22 per unit. The cost to place and process an order from the supplier is $73. The company operates 300 days per year, and the lead time to receive an order from the supplier is 3 working days. a) What is the economic order quantity? 306 units (round your response to the nearest whole number). b) What are the annual holding costs? $3365 (round your response to the nearest whole number). c) What are the annual ordering costs? $ (round your response to the nearest whole number).

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 14,100 units. Southeastern estimates its annual holding cost for this item to be $22 per unit. The cost to place and process an order from the supplier is $73. The company operates 300 days per year, and the lead time to receive an order from the supplier is 3 working days. a) What is the economic order quantity? 306 units (round your response to the nearest whole number). b) What are the annual holding costs? $3365 (round your response to the nearest whole number). c) What are the annual ordering costs? $ (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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Dave's Sporting Goods sells Mountain Mouse freeze-dried meals. Dave's uses a continuous review system to manage meal inventories. Suppose Mountain Mouse offers the following volume discounts to its customers: 1−950 meals: $6.50 per meal 951 or more meals: $4.50 per meal. Annual demand is 2,900 meals, and the cost to place an order is $23. Suppose the holding cost is $1.50 per meal per year. How many meals should Dave's order at a time? Part 2 Dave's Sporting Goods should order ______ meals at a time to take advantage of the lower cost per unit. (Enter your response rounded to the nearest whole number.)
8. A local retailer anticipates an annual demand 12000 units of a product. The retailer allows shortages for that product, and these shortages are backordered at a rate of 4 OMR per unit backordered. The cost of ordering is 200 OMR, whereas, the annual holding cost is 1 OMR per unit. The retailer operates 300 days per year. What is the optimal maximum inventory level? Round - up to the nearest integer ? a. 1987 b. 1789 c. 1960 d. None is correct e. 1898
The manager of a large electronics store wants to begin stocking a universal TV remote control device. Expected daily demand is 25 units (250 working days a year). The remote controls can be purchased from either supplier A or supplier B. Their price lists are as follows: Supplier A Supplier B Quantity Unit price Quantity Unit price 1-199 $14 1-149 $14.1 200-499 $13.8 150-349 $13.9 500+ $13.6 350+ $13.7 Ordering cost is $40 per order and annual holding cost is 25 percent of unit price. Lead time for either supplier is 10 days. Which supplier should be chosen and what kind of inventory ordering policy should be adopted?
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A gourmet coffe e shop in downtown San Francisco is open 200 days a year and sell s an average of 75 pounds of Kona coffee bea ns a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (fixed cost = $16 per order), beans are a lways shipped from Hawaii within exactly 4 days. Per-pound annual holding costs for the beans are $3.a) What is the economic order quantity (EOQ) for Kona coffee beans? b) What are the total annual holding costs of stock for Kona co!Tee beans?c) What are the total annual ordering costs for Kona co!Tee beans?d) Assume that management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point (ROP) be?c) What is the safety stock needed to attain a 1% risk of stockout during lead time?f) What is the annual holding cost of maintaining the level of safety stock needed to support a I% risk?g) If management…
Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is theFrench Bete Noire, which is shipped directly from France. Weekly demand is 45 cases.Millennium purchases each case for $120, there is a $300 fixed cost for each order(independent of the quantity ordered), and its annual holding cost is 25 percent.a. What order quantity minimizes Millennium’s annual ordering and holding costs?b. If Millennium chooses to order 300 cases each time, what is the sum of its annualordering and holding costs?c. If Millennium chooses to order 100 cases each time, what is the sum of the orderingand holding costs incurred by each case sold?d. If Millennium is restricted to ordering in multiples of 50 cases (e.g., 50, 100, 150, etc.),how many cases should it order to minimize its annual ordering and holding costs?e. Millennium is offered a 5 percent discount if it purchases at least 1000 cases. If itdecides to take advantage of this discount, what is the sum of its annual…
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 50 cars per month. The cars cost $80 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. (a)Determine the economic order quantity and total annual cost (in $) under the assumption that no backorders are permitted. (Round your answers to two decimal places.) Q*=TC=$ (b)Using a $45 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost (in $) for the model racing cars. (Round your answers to two decimal places.) Q*=TC=$ (c)What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop is open for business 300 days per year. (Round your answer to two decimal places.) days (d)Would you recommend a no-backorder or a backorder inventory policy for this…
Helen needs 1159 kgs of chicken per day on average to make enchiladas for her store. The supplier charges a $67 delivery fee per order (which is independent of the order size) and $3.90 per kg. Helen’s annual holding cost is 20%. Assume 52 weeks per year and 7 days per week. If Helen wants to minimize inventory holding and ordering costs, how much chicken should she purchase with each order (in kgs)? Provide your answer as an integer value.Use Econimic Order Quantity formula. The answer is 8,513. Not sure how to get there.
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I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…
In many respects, the food inventory decision for eachCelebrity cruise matches the single-period inventory modeldescribed in this chapter. Consider the decision about chicken.Suppose that Celebrity purchases chicken in bulk for $0.80 perpound, and any chicken left over after a cruise is donated tolocal food banks. Management estimates that a shortage penaltyof $1.00 per pound is incurred due to lost customer goodwillfrom unsatisfied demand. If chicken demand for a 7-daycruise is normally distributed with a mean of 3,000 pounds anda standard deviation of 200 pounds, how many pounds shouldbe brought onto the ship?