XYZ has developed the following data from its Material ASafety stock280Average (normally) daily use200Maximum daily use240Minimum daily use180EOQ1,000Cost of placing an orderP20Working days per year250 daysLead time6 days What is the normal maximum inventory?

XYZ has developed the following data from its Material ASafety stock280Average (normally) daily use200Maximum daily use240Minimum daily use180EOQ1,000Cost of placing an orderP20Working days per year250 daysLead time6 days What is the normal maximum inventory?

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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XYZ Company has developed the following data from its Material A: Safety stock 280 Average (normally) daily use 200 Maximum daily use 240 Minimum daily use 180 Economic order quantity 1000 Cost of placing an order $20 Working days per year 250 days Lead time 6 days 1. What is the cost of carrying an inventory per unit per year? 2. What is the average inventory?
7. XYZ has developed the following data from its Material A Safety stock Average (normally) daily use Maximum daily use Minimum daily use EOQ 280 240 180 1.000 Cost of placing an order Working days per year 200 P20 250 days Lead time 6 days What is the absolute maximum inventory?
Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): StandardQuantity x StandardPrice = StandardCost Direct materials 3 pounds $4.50 per pound $13.50 Direct labor 2.00 hours 12.00 per hour 24.00 Total cost $37.50 Sitka Industries made 2,900 ladders in July and used 8,500 pounds of material to make these units. Sitka Industries bought 15,400 pounds of material in the current period. There was a $300 unfavorable direct materials price variance. Enter all amounts as positive numbers. A. How much in total did Sitka pay for the 15,400 pounds? B. What is the direct materials quantity variance? C. What is the total direct materials cost variance? D. What if 9,200 pounds were used to make these ladders, what would be the direct materials quantity variance? E. If there was a $340 favorable direct materials price variance, how much did Sitka pay…
A mgr. must set up an invty system for two (2) new production items, P34 & P35. P34 can be ordered at any time, butP35 can only be ordered once every 4 weeks. The co. operates 50 weeks a year and the weekly usage rates for both itemsare normally distributed. The mgr. has gathered the following information about the items:Item P34 Item P35Average wkly demand 60 units 70 unitsStandard deviation 4 units per wk 5 units per wkUnit cost $15 $20Annual Holding cost 40% 40%Ordering cost $70 $30Lead time 2 weeks 2 weeksAcceptable stockout risk 5% 5%a) When should the manager reorder each item?b) Compute the order quantity for P34c) Compute the reorder point for P35 if 110 units are on hand at the time the order is placed
A National chain of type fitters stocks a popular type for which the following information is available. The company operates on 50-week year and Normally operates from Monday to Friday only. Average usage 140 types per day Minimum usage 90 types per day Maximum usage 175 types per day Lead time 10 to 16 days Reorder quality 3000 Cost per types n$1500 Holding cost per unit 3% of unit cost Ordering cost per year n$75.50 Calculate the ordinary coat based on the current reorder quantity?
A manager must set up inventory ordering systems for two new production items, P34 and P35.P34 can be ordered at any time, but P35 can be ordered only once every four weeks. The companyoperates 50 weeks a year, and the weekly usage rates for both items are normally distributed. Themanager has gathered the following information about the items.Item P34 Item P35Average weekly demand 60 units 70 unitsStandard deviation 4 units per week 5 units per weekUnit cost $15 $20Annual holding cost 30% 30%Ordering cost $70 $30Lead time 2 weeks 2 weeksAcceptable stockout risk 2.5% 2.5%a. When should the manager reorder each item?b. Compute the order quantity for P34.c. Compute the order quantity for P35 if 110 units are on hand at the time the order is placed.
Usha Handling Company is currently faced with an inventory rotation problem. Thisdifficulty stems from the fact that some supplies must be used prior to a stated expiration date.Upon receipt, a new shipment of these perishable items must be stacked beneath the boxes that are currently in inventory. A substantial amount of time is consumed in restacking the items according to their expiration dates. The company would like to reduce the double and sometimes triple handling of items. How can this goal be achieved? Are there alternative solutions which might also be effective?
Unaiki manages the inventory for Hine's kids collection. She's had too many stockouts lately and is worried about poor customer service. Therefore, she is considering a change to the current inventory control system for kids track pants. She gathers the following information: average demand: 250 pairs/week lead time: 2 weeks order cost = $75 per/order unit cost: $21.50 carrying charge rate = 18% desired service level = 95% standard deviation of weekly demand: 40 number of weeks per year: 52 Unaiki decides to use a fixed order quantity system. a. What is the Economic Order Quantity? b. What are the total annual order and inventory-holding costs for the EOQ? c. What should the reorder point be to have a 95% service level? d. Help Unaoiki understand her new order logic: In order to stay in stock 95% of the time. she should place an order for ________ pairs when ____________.
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 10 boxes per week Store open = 48 weeks/year Order cost = $36/order Lead-time = 5 weeks Item cost = $72/box Std. deviation in weekly demand = 6 Inventory-holding cost = 25 percent per year Service level = 90 percent Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 80 units on-hand. There were no…
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 10 boxes per weekStore open 48 weeks/yearOrder cost = $40/orderLead-time = 4 weeksItem cost = $80/boxStd. deviation in weekly demand = 6Inventory holding cost = 15% per yearService level = 90% Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 55 units on-hand. There were no scheduled receipts, and 25 units…
Muscle Bound is a chain of fitness stores located in many largeshopping centers. Recently, an internal memo from the CEOto all operations personnel complained about the budget over-runs at Muscle Bound’s central warehouse. In particular, shesaid that inventories were too high and that the budget will becut dramatically and proportionately equal for all items in stock.Consequently, warehouse management set up a pilot study tosee what effect the budget cuts would have on customer service.They chose 5-pound barbells, which are a high volume SKU andconsume considerable warehouse space. Daily demand for thebarbells is 1,000 units, with a standard deviation of 150 units.Ordering costs are $40 per order. Holding costs are $2/unit/year.The supplier is located in the Philippines; consequently, thelead time is 35 days with a standard deviation of 5 days. MuscleBound stores operate 313 days a year (no Sundays).Suppose that the barbells are allocated a budget of $16,000 fortotal annual costs. If…
6. XYZ has developed the following data from its Material A Safety stock Average (normally) daily use Maximum daily use Minimum daily use E0Q 280 240 180 1.000 200 Cost of placing an order Working days per year P20 250 days Lead time 6 days What is the reorder point?