Give typed full explanation not written Suppose in an inventory management scenario we are using the Exonomic OrderQuantity to set the order quantity for a particular item. For this item, we have thefollowing information:Demand (Annual): 2,200Ordering Cost: $58Holding Cost (Per Year Per Unit): $13What will be the EOQ for this item? (Round your answer to the nearest wholenumber.)

To find the best order quantity for a company's inventory, inventory managers utilize the Economic…

Answered: Suppose in an inventory management…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter3: Introduction To Optimization Modeling

Section3.8: A Multiperiod Production Model

Problem 22P

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A bookstore manages the inventory based on a continuous review system with the order quantity Q = 40, and the reorder point = 25. The lead time is 2 days without uncertainty. At the end of day 0, the inventory position = on-hand inventory = 40. The demand in the following five days is 7, 6, 9, 13, and 8, respectively. What is the inventory position at the end of day 5? a. 22 b. 3 c. 43 d. 37
A company is planning for its financing needs and uses the basic fixed-order quantity inventory model. Which of the following is the total cost (TC) of the inventory given an annual demand of 10,000, setup cost of $32, a holding cost per unit per year of $4, an EOQ of 400 units, and a cost per unit of inventory of $150?
Suppose demand is know and constant at 500 units per year (one year has 250 working days). The holding cost is $2 per unit per year and the ordering cost is $20 per order. Also assume that the lead time is 10 days. Compute the optimal order quantity (EOQ) and the optimal annual inventory cost. Draw a picture of the evolution of the inventory level with time. Indicate the ROP on the picture as well as the length of the cycle. Now assume that the lead time is 90 days. Indicate the ROP on the picture.
The annual demand for an item is 10,000 units. The cost to process an order is $75 and the annual inventory holding cost is 20% of item cost. What is the optimal order quantity, given the following price breaks for purchasing the item? What price should the firm pay per unit? What is the total annual cost at the optimal behavior? Quantity Price 1 – 9 $2.95 per unit 10 – 999 $2.50 per unit 1,000 – 4,999 $2.30 per unit 5,000 or more $1.85 per unit
Penalty costs can be assessed only against the number of units of demand that cannot be satisfied, or against the number of units weighted by the amount of time thatan order stays on the books. Consider the following history of supply and demandtransactions for a particular part:Number of Items Demand duringMonth Received MonthJanuary 200 520February 175 1,640March 750 670April 950 425May 500 280June 2,050 550Assume that starting inventory at the beginning of January is 480 units.a. Determine the ending inventory each month. Assume that excess demands areback-ordered.b. Assume that each time a unit is demanded that cannot be supplied immediately,a one-time charge of $10 is made. Determine the stock-out cost incurred duringthe six months (1) if excess demand at the end of each month is lost, and (2) ifexcess demand at the end of each month is back-ordered.c. Suppose that each stock-out costs $10 per unit per month that the demandremains unfilled. If demands are filled on a first-come,…
At Dot Com, a large retailer of popular books, demand isconstant at 20,400 books per year. The cost of placing anorder to replenish stock is $35, and the annual cost of holdingis $6 per book. Stock is received 5 working days after an orderhas been placed. No backordering is allowed. Assume 250working days a year.a. What is Dot Com’s optimal order quantity?b. What is the optimal number of orders per year?c. What is the optimal interval (in working days) betweenorders?
A distribution center (DC) in Wisconsin stocks Sony plasma TV sets. The center receives its inventory from a mega warehouse in Kansas with a lead time (L) of 5 days. The DC uses a reorder point (R) of 300 sets and afixed order quantity (Q) of 250 sets. The current on-hand inventory (OH) at the end of Day 1 is 400 sets, there are no scheduled receipts (SR), and there are no backorders (BO). Assume that all demands and receipts occur at the end of the day. The inventory position is compared to the reorder point after demands and receipts are accounted for. If necessary, an order is placed and the inventory position is updated. Given the demand schedule in the table below, determine when to order using a (Q) system
The two most important inven tory-based questionsanswered by the typical inventory model are:a) when to place an order and the cost of the order.b) when to place an order and how much of an item to order.c) how much of an item to order and the cost of the order.d) how much of an item to order and with whom the order should be placed.
The demand for a clothing brand is shown in the table below. The cost per order is about $4000. Cost of each unit of clothing = $5. Carrying cost percentage = 25% per item per 5 months. The analysis period = 5 month duration. Month Demand 1 400 2 300 3 200 4 400 5 500 a. Using this data, compute the solutions using the Lot for Lot and Periodic Order Quantity heuristics? Which of these heuristics would perform better and why? b. Assuming that the demand follows a normal distribution with the mean and variance from the data given above, determine the optimal order should be greater or lesser than the single period EOQ model.
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.
Skinner’s Fish Market buys fresh Boston bluefish daily for $4.10 per pound and sells it for $5.60 per pound. At the end of each business day, any remaining bluefish is sold to a producer of cat food for $1.60 per pound. Daily demand can be approximated by a uniform distribution between 180 and 350 pounds. The optimal order quantity is pounds (round your response to the nearest integer).
An online retailer sells 1,500 t-shirts per year. The cost of the t-shirts to the store is $3.00 and the cost of placing an order is $15 per order. It cost $0.60 per t-shirt per year for the retailer to hold the t-shirts. The retailer sells the t-shirts for $9.99. Determine (a) the optimal order quantity, (b) the order frequency (c) the annual holding and setup cost.

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