please solve 2.Suppose that FCC Company manufactures and sells a product having a demand rate of 30,000 units peryear. The manufacturing rate is 40,000 units in one year. The setup cost is $100 for each manufacturing run.The manufacturing cost (independent from the setup cost) is $30 per unit, and the annual inventory holdingcost per unit is 20% of the unit manufacturing cost. Stockouts are not allowed.(a) What is the economic production quantity?(b) If the economic production quantity is used, then calculate:• cycle time,number of production runs in a year,length of a production run in a cycle,• length of down time,maximum level of on-hand inventory, andaverage inventory per cycle.

It is given that the demand rate is 30,000 units and manufacturing rate is 40,000 per year.…

Answered: What is the economic production…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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You are managing a company that stocks and distributes hardware. Thecompany employs two purchasing agents who receive combined salaries of$90,000. They process 6,000 purchase requests per year. Average inventoryin storage is $600,000, and the total cost of running the warehouse is$200,000. You are told that the company purchases 5,000 hammers per yearat a cost of $5.34 per hammer.a. Using the economic order quantity (EOQ) formula, how many hammersshould be ordered at one time?b. If the hammer vendor stated that it would charge $5.00 per hammer if youordered 200 or more at a time, what should you do?
Daily demand for a certain product is normally distributed with a mean of 100 and a standarddeviation of 15. The supplier is reliable and maintains a constant lead time of 5 days.The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit peryear. There are no stockout costs, and uni lled orders are i lled as soon as the order arrives.Assume sales occur over 360 days of the year.Your goal here is to i nd the order quantity and reorder point to satisfy a 90 percentprobability of not stocking out during the lead time.a. What type of system is the company using?b. Find the order quantity.c. Find the reorder point.
A company stocks an SKU with a weekly demand of 225 units and a lead timeof 3 weeks. Management will tolerate one stockout per year. If sigma for the leadtime is 175 and the order quantity is 800 units, what is the safety stock, the averageinventory, and the order point?
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?
Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order. What is the minimum total stock administration cost for the product? Select one: a. $1,000 b. $2,000 c. $10,000 d. $200
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3,700 cases. A case of the soft drink costs R&B $4. Ordering costs are $20 per order and holding costs are 23% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy
For a company operating 300 days a year, the annual demand is 63,000 units, the lead time is 4 days, the ordering cost per order is BD 80 and the inventory turnover is 12, the reorder point is A. Every 12 days B. Every 4 days C. When 175 units remain D. When 840 units remain
1. The monthly demand for a part is 1,500 units. The order cost is $285 per order, the holding cost is $56 per unit per year and the part cost is $850 per unit. The firm operates twelve months per year. Compute the (a) EOQ, (b) annual holding cost, (c) annual order cost, and (d) annual total inventory cost. 2. The weekly requirement of a part is 950 units. The order cost is $85 per order, the holding cost is $5 per unit per year and the part cost is $250 per unit. The firm operates fifty-two weeks per year. Compute the (a) EOQ, (b) annual holding cost, (c) annual order cost, and (d) annual total inventory cost. 3. Given the following information, compute the economic order quantity, annual holding cost, annual order cost and annual total inventory cost.Annual requirements (R) = 50,000 unitsOrder cost (S) = $150 per orderHolding rate (k) = 15%Unit cost (C) = $100 per unit
a) The average monthly demand requirementequals = ___ units. (whole number) b) The total stockout cost = $____(whole number.) c) The total inventory carrying cost = $____(whole number) d) The total cost, excluding normal time labor costs, is = $____(whole number.)
Brit wants to sell throw blankets for the holiday season at a local flea market. Brit purchases the throws for $40, and sells them to his customers for $55. Assume there is no leftover value for unsold units. The payoff, if he orders 100 and demand is 99, is ______.
6-27 Ross White’s machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost), and the ordering cost per order is $18.75. There are 250 working days per year. 6-28 Ross White wants to reconsider his decision of buying the brackets and is considering making the brackets in-house. He has determined that setup cost would be $25 in machinist time and lost production time and that 50 brackets could be produced in a day once the machine has been set up. Ross estimates that the cost (including labor time and materials) of producing one bracket would be $14.80. The holding cost would be 10% of this cost. ^ I 6-29 Upon…
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,…

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