The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S = $5/order, and I= 20% of item price. Current price is $19.2 per unit (without any discount). Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Show your work. Order Quantity to 50 Price 101 and up 51 to 100 INo discount 20% discount 40% discount What should the order quantity be in order to minimize the total annual cost? Show your work. D-960 S-55 1-20% CURRENT PRICE-19.20
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- The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 10,000 units, S= $75/order and I = 20% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Please answer in excel formatMiguel has a product with an annual holding cost percentage of 20%, an ordering cost of $110 per order, and annual demand of 15,000 units. The following price schedule applies to the product from a supplier. What is the optimal order quantity? Show all work including a graph. Units Price 1-250 $30.00 251-500 $28.00 501-750 $26.00 ≥ 751 $25.00The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.
- A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1,000, $5 each; 1,000 to 3,999, $4.95 each; 4,000 to 5,999,$4.90 each; and 6,000 or more, $4.85 each. Ordering costs are $50, annual carrying costs per unitare 40 percent of purchase cost, and annual usage is 4,900 pulleys. Determine an order quantitythat will minimize total cost.The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S= $20/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost?The sales of a popular mouthwash at Merkle Pharmacies over the past 6 months have averaged 1,800 cases per month resulting in 21,600 cases per month, which is the current order quantity. Merkle’s cost is $14.00 per case. The company estimates its cost of capital to be 10 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 5 percent of item cost. Thus, the annual inventory-holding costs are estimated to be 15 percent of item cost. The cost of placing an order is estimated to be $36.00 per order regardless of the quantity requested in the order. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. 1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number. fill in the blank 2 cases 2. What is the annual ordering cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your…
- A company incurs an ordering cost of $232 each time it places an order, regardless of the order size. The item's cost is $5, and the annual carrying charge for the item is 30%. If the annual demand for this item is 2,880 and the company's order quantity (Q) is 944, calculate its total annualized cost of inventory. The total annualized inventory costs are $.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,…The soft goods department for AMG sells 175 units per month of a certain large bath towel. The unit cost of a towel to the manufacturer is R2.50 and the cost of placing an order has been estimated to be R12.00. The organization uses an inventory carrying charge of 27% of the unit cost per year. Determine the optimal order quantity, the order frequency, and the annual holding and setup cost Item Annual Demand Unit Cost A211 800 R9 B390 100 R90 C003 450 R6 D100 400 R100 E707 85 R2000 F660 250 R320 G473 500 R75 H921 100 R75
- If the following data is known in determining the Quantity Discount with EOQ - Demand rate = 100.000 - Ordering Cost = 5000 - Holding/Carrying cost = 600 Price Range LOWER UPPER PRICE 1 1 1000 1000 2 1001 1500 900 3 1501 3000 800 4 3001 3500 700 5 3501 3750 650 6 3751 4000 600 Based on the data provided, determine the optimal order quantity and total cost for this case! 2 1001 1500 900 3 1501 3000 800 4 3001 3500 700 5 3501 3750 650 6 3751 4000 600The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?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.