Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving Inventory item has a demand of 5,850 units per year. The cost of each unit is $101, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $29 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 117 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? 205.94 units (round your response to two decimal places) b) What is the average inventory if the EOQ is used? 102.97 units (round your response to two decimal places) c) What is the optimal number of orders per year? 28.41 orders (round your response to two decimal places) d) What is the optimal number of days in between any two orders? 8.80 days (round your response to two decimal places). e) What is the annual cost of ordering and holding inventory? $ 1647.94 per year (round your response to two decimal places) What is the total annual inventory cost, including the cost of the 5,850 units? $ 582600.31 per year (round your response to two decimal places)

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving Inventory item has a demand of 5,850 units per year. The cost of each unit is $101, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $29 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 117 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? 205.94 units (round your response to two decimal places) b) What is the average inventory if the EOQ is used? 102.97 units (round your response to two decimal places) c) What is the optimal number of orders per year? 28.41 orders (round your response to two decimal places) d) What is the optimal number of days in between any two orders? 8.80 days (round your response to two decimal places). e) What is the annual cost of ordering and holding inventory? $ 1647.94 per year (round your response to two decimal places) What is the total annual inventory cost, including the cost of the 5,850 units? $ 582600.31 per year (round your response to two decimal places)

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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The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
Thomas Kratzer is the purchasing manager for theheadquarters of a large insurance company chain with a centralinventory operation. Thomas’s fastest-moving inventory item hasa demand of 6,000 units per year. The cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. The aver-age ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is acorporate operation, and there are 250 working days per year.)a) What is the EOQ?b) What is the average inventory if the EOQ is used?c) What is the optimal number of orders per year?d) What is the optimal number of days in between any two orders?e) What is the annual cost of ordering and holding inventory?f ) What is the total annual inventory cost, including the cost ofthe 6,000 units?
Thomas Kratzer is tbe purchasing manager for theheadquarters of a la rge insurance company chain with a centralinventory operation. Thomas's fas test-moving inventory itemhas a demand of 6,000 units per year. The cost of each unit is$ 100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for anorder to arrive, and the demand for I week is 120 units. (This is acorporate operation, and there are 250 working days per year.)a) What is the EOQ?b) What is the average inventory if the EOQ is used?c) What is the optimal number of orders per yea r?d) What is the optimal number of days in between any two orders?e) What is the annual cost of ordering and holding inventory?f) What is the total annual inventory cost, including the cost ofthe 6,000 units?
Thomas Kratzer is the purchasing manager forthe headquarters of a large insurance company chain witha central inventory operation. Thomas’s fastest-movinginventory item has a demand of 6,000 units per year. The costof each unit is $100, and the inventory carrying cost is $10 perunit per year. The average ordering cost is $30 per order. Ittakes about 5 days for an order to arrive, and the demand for1 week is 120 units. (This is a corporate operation, and thereare 250 working days per year.)a) What is the EOQ?b) What is the average inventory if the EOQ is used?c) What is the optimal number of orders per year?d) What is the optimal number of days in between any twoorders?e) What is the annual cost of ordering and holding inventory?f) What is the total annual inventory cost, including the costof the 6,000 units?
Ezrah is attempting to perform an inventory analysis on one of her most popular beauty products, the "Heavenly perfume. Annual demand for this product is 10,000 units with carrying costs of P50 per unit per year. The ordering costs for her company typically run P100 per order. Lead time averages 10 days( Assume 250 working days). Compute the total inventory cost
Ezrah is attempting to perform an inventory analysis on one of her most popular beauty products, the Heavenly perfume Annual demand for this product is 10,000 units with carrying costs of P50 per unit per year . ordering costs for her company typically run P100 per order Lead time averages 10 days (Assume 250 working days) What is the economic order quantity?
Please do not give solution in image formate thanku Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $98, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units. (This is a corporate operation, and there are 250 working days per year). A) What is the EOQ?B) What is the average inventory if the EOQ is used?C) What is the optimal number of orders per year?D) What is the optimal number of days in between any two orders?E) What is the annual cost of ordering and holding inventory?F) What is the total annual inventory cost, including cost of the 6,100 units?
Franz Beckenbauer and Johan Cruyff are purchasing managers for the headquarters of a largesports marketing company chain with a central inventory operation. Their fastest-moving inventory item hasa daily demand of 35 units. The cost of each unit is £200, and the inventory carrying cost is £25 per unitper year. The average ordering cost is £60 per order. It takes about 5 days for an order to arrive, and thereare 252 working days per year. a) To minimize the cost, how many units should be ordered each time an order is placed?What is the total annual inventory cost, including the cost of the units? b) How can they manage the days it takes for an order to arrive? (How does it impact theiroperations and costs?) c) b) Even if there is substantial uncertainty in the parameters in the EOQ-model, it is still quite auseful model. Discuss why. I got this anwsers but i am not sure if its correct: For question 1: EOQ=294 Annual Holding Cost= Q/2 H= 2942×25=£3675 Annual Ordering Cost=Q/D S=…
Franz Beckenbauer and Johan Cruyff are purchasing managers for the headquarters of a largesports marketing company chain with a central inventory operation. Their fastest-moving inventory item hasa daily demand of 35 units. The cost of each unit is £200, and the inventory carrying cost is £25 per unitper year. The average ordering cost is £60 per order. It takes about 5 days for an order to arrive, and thereare 252 working days per year. a) To minimize the cost, how many units should be ordered each time an order is placed?What is the total annual inventory cost, including the cost of the units?b) How can they manage the days it takes for an order to arrive? (How does it impact theiroperations and costs?)c) b) Even if there is substantial uncertainty in the parameters in the EOQ-model, it is still quite auseful model. Discuss why.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas’s fastest-moving inventory item has a demand of 6,000 units a year. The purchasing cost of each unit is $16 (additional 5% discount applies if at lease 150 units ordered a time), and the inventory carrying cost is $3 per unit per year. The average ordering cost is $10 per order. It takes about 3 working days for an order to arrive. (This is a corporate operation, and there are 300 working days per year.) Answer the following questions, Q1~Q5. Note that you must include Excel formulas/calculations showing how you arrive at the answer. Q1: Assume that the demand is consistent throughout the year. What is the ROP? Note that stockouts and unnecessary inventory holding should be avoided at any times. Q2: Assume that the demand is consistent throughout the year. Based on the EOQ model, to minimize the costs of purchasing, ordering and inventory holding…
Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit. To provide a 98 percent service probability, what must the reorder point be? Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number. Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be? Note: Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round z value to 2 decimal places and final answer to the nearest whole percent.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,950 units per year. The cost of each unit is $99, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 119 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ?units (round your response to two decimal places).