Suppose that a product with an annual demand of 2400 units, a setup cost per production run of $8, and a holding cost of $1 per unit per year. With 200 working days in a year, conisder the following ordering plans: 1) order 600 units once each quarter and all 600 units will be delivererd in a single day 2) order 200 units once each month and all 200 units will be delivered in a single day 3) order 120 units each 6-month, and each order will be delivered over a period of 60 days a) Suppose that the items will be delivered at a rate of 40 pieces per day, what is the minimum overall costs in this case? b) Which ordering strategy has the lowest overall cost and why?

Suppose that a product with an annual demand of 2400 units, a setup cost per production run of $8, and a holding cost of $1 per unit per year. With 200 working days in a year, conisder the following ordering plans: 1) order 600 units once each quarter and all 600 units will be delivererd in a single day 2) order 200 units once each month and all 200 units will be delivered in a single day 3) order 120 units each 6-month, and each order will be delivered over a period of 60 days a) Suppose that the items will be delivered at a rate of 40 pieces per day, what is the minimum overall costs in this case? b) Which ordering strategy has the lowest overall cost and why?

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Description: Suppose that a product with an annual demand of 2400 units, a setup cost per production run of $8, and a holding cost of $1 per unit per year. With 200 working days in a year, conisder the following ordering plans:1) order 600 units once each quarte

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 15P

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Suppose that a product with an annual demand of 2400 units, a setup cost per production run of $8, and a holding cost of $1 per unit per year. With 200 working days in a year, conisder the following ordering plans: 1) order 600 units once each quarter and all 600 units will be delivererd in a single day 2) order 200 units once each month and all 200 units will be delivered in a single day 3) order 120 units each 6-month, and each order will be delivered over a period of 60 days a) Calculate the annual holding and setup costs associated with each plan b) When items arrive in one batch, what is the optimal order quantity to minimize overall costs?
Consider that you work at Kroger Grocery store, and that you've been tasked with creating an ABC inventory classification for 6 items. The 6 items, as well as their profit per case and number of cases sold per week, are as follows:Ribeye Steak - $135 in profit per case, 3 cases sold per weekLobster Tail - $245 in profit per case, 3 cases sold per weekPasta - $23 in profit per case, 12 cases sold per weekSalt - $3 in profit per case, 2 cases sold per weekNapkins - $12 in profit per case, 2 cases sold per weekTomato Sauce - $23 in profit per case, 11 cases sold per weekUsing total weekly profits, please classify each products into A, B, or C categories. Which items form the boundary of the class A and B items in your classification, and why? Which items form the boundary of the class B and C items in your classification, and why?
A manager receives a forecast for next year. Demand is projected to be 600 units for the first half of the year and 920 units for the second half. The monthly holding cost is $2 per unit, and it costs an estimated $55 to process an order. a.Assuming that monthly demand will be level during each of the six-month periods covered by the forecast (e.g., 100 per month for each of the first six months), determine an order size that will minimize the sum of ordering and carrying costs for each of the six-month periods. (Round your answers to the nearest whole number.) Period Order Size 1 – 6 months?_____units 7 – 12 months?_____units b.If the vendor is willing to offer a discount of $10 per order for ordering in multiples of 50 units (e.g., 50, 100, 150), would you advise the manager to take advantage of the offer in either period? If so, what order size would you recommend? (Round intermediate calculations to 2 decimal places.) Period Order Size 1 – 6 months?____ units 7 – 12 months?____…
The maintenance department of a large hospital uses about 816 cases of liquid cleanserannually. Ordering costs are $12, carrying costs are $4 per case a year, and the new priceschedule indicates that orders of less than 50 cases will cost $20 per case, 50 to 79 caseswill cost $18 per case, 80 to 99 cases will cost $17 per case, and larger orders will cost $16per case. Determine the optimal order quantity and the total cost.
Please complete the sup part: e,f and g. 1.B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is 200 cameras per week. Each time that B&H places an order for a new shipment of cameras, it must pay $80 in fixed processing fees. A camera costs B&H $60 to purchase. The cost for B&H to hold a camera in its store for one week is $4. Assume that the lead time for the delivery of a camera is 0 weeks.a. Suppose that B&H places orders for cameras in quantities of 50 cameras at a time and places a new order for cameras each time that it runs out. Draw a graph showing the number of cameras that B&H has on-hand in inventory at each point in time up until the time when it places its fourth-order. Label the points in time at which B&H places a new order. Assume that B&H places its first order for 50 cameras on day 0.b. Suppose again that B&H places orders for 50 cameras at a time. What will be B&H’s average holding…
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.
Average Inventory Calculation—Fixed–Order Quantity ModelSuppose the following item is being managed using a fixed–order quantity model with safety stock.Annual demand (D) = 1,000 unitsOrder quantity (Q) = 300 unitsSafety stock (SS) = 40 unitsWhat are the average inventory level and inventory turn for the item?
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
Recently, a kiddie store has been given a quantity discount schedule for these cats. Thus, the normal cost for the toy cars is P200.00. For orders betweeen 1,000 and 1,999 units, the unit cost drops to P192.00. For orders of 2,000 or more units, the unit cost is only P190.00. Furthermore, ordering cost is P1,960.00 per order. Annual demand is 5,000 toy cars, and inventory carrying charge, as a percentage of cost, I, is 20%. What order size quantity will minimize the total inventory cost?
I NEED IT TODAY, 1. B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is 200 cameras per week. Each time that B&H places an order for a new shipment of cameras, it must pay $80 in fixed processing fees. A camera costs B&H $60 to purchase. The cost for B&H to hold a camera in its store for one week is $4. Assume that the lead time for the delivery of a camera is 0 weeks.a. Suppose that B&H places orders for cameras in quantities of 50 cameras at a time and places a new order for cameras each time that it runs out. Draw a graph showing the number of cameras that B&H has on-hand in inventory at each point in time up until the time when it places its fourth order. Label the points in time at which B&H places a new order. Assume that B&H places its first order for 50 cameras on day 0.b. Suppose again that B&H places orders for 50 cameras at a time. What will be B&H’s average holding costs per week? What will…
c. Once you find the optimal order quantity i.e., EOQ, create a Data Table that generates inventory cost within ±100 units (with 10units increment) from the optimal order quantity. For example, if the EOQ=150, then you need to generate Data Table for inventory cost starting from 50 to 250 with 10 increments. Explain the exact steps completed in excel to create the data table d. Create a Scatter plot with “smooth lines” for the Data Table created in c) to show the inventory cost. Label your plot clearly (axis and title). The optimum order quantity should indicate the minimum cost in your plot.
Dave’s local college football team is playing for the national championship in next month’s bowl game, and he’s thinking about having “We’re number one” T-shirts imprinted in honor of the team. It’s too late to get the shirts before game day, but if he orders today, he can get them within a few days after the game. The shirts must be ordered in multiples of 1000, and Dave has estimated the amount of profit he will make for possible outcomes of the game. Given the following payoff table, what will Dave do if he uses the maximin criterion? The maximax criterion? The minimax regret criterion? Order no shirts $0 wins $0 loses $0 ties Order 1000 shirts $800 wins $-200 loses $200 ties Order 2000 shirts $1600 wins $-400 loses $300 ties