The desired level of safety stock to be maintained is determined by O a Desired level of Product availability Ob Uncertainty of demand Oc. Uncertainty of supply d. Desired level of customer requirement.
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The desired level of safety stock to be maintained is determined by
O a Desired level of Product availability
Ob Uncertainty of demand
Oc. Uncertainty of supply
d. Desired level of customer requirement.
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- CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem: Price of copper $ 0.79 per pound up to 2,999 pounds $ 0.78 per pound for orders between 3,000 and 5,999 pounds $ 0.76 per pound for orders 6,000 pounds or greater Annual demand 50,000 pounds per year Holding cost 20 percent per unit per year of the price of the copper Ordering cost $ 30 Which quantity should be ordered?CU Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price break and other data for the problem. Price copper $ .81 per pound up to 2,499 pounds .80 2,500-4,999 pounds .78 5,000 pound or greater Annual demand 51,000 pounds per year Holding cost 30 % per unit/yr. Of the price of copper Ordering cost $ 30 Which quantity should be ordered?The EOQ model isa) not very useful in practice since the assumptions areunrealisticb) finds the optimal safety stockc) is quite useful, due to the fact that the optimum is quite flatd) depending on the standard deviation of the demande) has an impact of the re-order-point
- 37 Buffer stock is the level of stock: Select one: a. Level at which ordering process should start b. Half of maximum stock c. Maximum stock in inventory d. Minimum stock level below which actual stock should not fallThe safety stock in re-order point system:a) shall with a certain probability cover demand exceedingthe expected during the lead-timeb) is a non-linear function of lead-timec) is not depending on the order-quantityd) all of the above.Suppose that the EOQ is 100, average annual demand is1,000 units, and the lead time demand is a random variablehaving the distribution shown in Table 15.a What value of SLM1 corresponds to a reorder pointof 25?b If we wanted to attain a 95% value of SLM1, whatreorder point should we choose?c If we wanted an average of at most two stockouts peryear, what reorder point should we choose? Lead TimeDemand Probability10 16 15 14 20 14 25 112 30 14
- Banana Inc. a Company that markets skin care products . The annual demond is 2400 units and ordering cost is 10 per order . The holding cost per year is 0.30 .Amount of the working days of the is 250 days in a year , Lead time of the order is 2 days . a. What is the optimal order size? b. What is the optimal number of orders per year? c. What is the optimal number of days between orders? d. What is the annual inventory cost? e. If the lead time were 2 days, what would be the reorder point? f. For what value of ordering cost would 1000 units of order size be optimal? g. Determine how often the firm should order. h. Determine the size of each order ı. At what price should the firm order?Forrest and Dan make boxes of chocolates for which the demand is uncertain. Forrest says, “That’s life.” On the other hand, Dan believes that some demand patterns exist that could be useful for planning the purchase of sugar, chocolate, and shrimp. Forrest insists on placing a surprise chocolatecovered shrimp in some boxes so that “You never know what you’ll get.” Quarterly demand (in boxes of chocolates) for the last 3 years follows: Quarter Year 1 Year 2 Year 3 1 2 3 4 3,000 1,700 900 4,400 3,300 2,100 1,500 5,100 3,502 2,448 1,768 5,882 Total 10,000 12,000 13,600 a. Use intuition and judgment to estimate quarterly demand for the fourth year.b. If the expected sales for chocolates are 14,800 cases for year 4, use the multiplicative seasonal method to prepare a forecast for each quarter of the year. Are any of the quarterly forecasts different from what you thought you would get in part (a)?Gamin Inc. produces various GPS devices with a wide assortment of different models for its customers. One item, RC1 is very popular. Keen of keeping its stock under control, a decision is taken to order only the optimum economic quantity, for this item, each time. You have the following information. Annual demand (units) 115,200 Purchase price per unit $ 300 Carrying/Holding costs per unit $ 8 Cost per order $ 200 Required: a.Determine the EOQ using the equation method. b.Fill the blanks in the following table using the above data. No. of orders 1 10 20 30 90 120 Order size Average stock Carrying (Holding) costs Order costs Total costs Calculate the holding, ordering cost & their total cost at the EOQ level. Plot the graph at the EOQ level showing the…
- 1) Store A orders on a weekly basis. Its weekly demand is 50 units with a standard deviation of five units. The holding cost is $10 per unit per week and a 0.99 in-stock probability is desired. What is Store A’s average holding cost incurred each week for on-order inventory if lead time is five weeks? 2) Store A orders on a weekly basis. Its weekly demand is 50 units with a standard deviation of five units. The holding cost is $10 per unit per week and a 0.99 in-stock probability is desired. What is Store A’s average on-hand inventory if lead time is five weeks?The demand for a certain product is 33.33 units per day. The holding cost is known to be $ 0.067 per unit per day and the shortage cost is $ 0.33 per unit per day. Historical data shows that the demand during the lead time is normal distribution with mean 3 and standard deviation 0.5. The optimal ordering policy / day =The Fed increases the interest rate suddenly, leading to a sharp and immediate increase in loan interest rates. How will the EOQ behave in the immediate/short run? Assume all other variables stay relatively unchanged in the immediate term. EOQ = Sq root of [(2D*S)/H] D = annual demand in units S = cost of placing 1 order; H = cost of holding 1 unit of that item in inventory for 1 year EOQ will not be affected EOQ will increase EOQ will decrease