Operations Management With Connect
1st Edition
ISBN: 9781259692154
Author: Gerard Cachon Associate Professor Dr., Christian Terwiesch Associate Professor
Publisher: McGraw-Hill Education
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Chapter 10, Problem 12PA
Summary Introduction
To determine: The inventory holding cost.
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Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 2, 750 rolls. The cost per roll is 500$, and the annual holding cost is 28percent of the cost. Each order costs 45$. Part 2 a. How many rolls should Yellow Press order at a time? Yellow Press should order enter your response here rolls at a time. (Enter your response rounded to the nearest whole number.)
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A small mail-order company uses 14,000 boxes a year. Holding cost rate is 18 percent of unit cost per year, and ordering cost is $33 per order. The following quantity discounts are available.
Number of Boxes Price per Box 1,000 to 1,999 $1.15 2,000 to 4,999 1.10 5,000 to 9,999 1.05 10,000 or more 1.00
a. Determine the optimal order quantity.
Optimal order quantity boxes
b. Determine the number of orders per year. (Round the final answer to 1 decimal place.)
No. of orders per year
Which of the following is an element of inventory holding costs?
All of these are elements of inventory holding costs.
investment costs
housing costs
material handling costs
pilferage, scrap, and obsolescence
Chapter 10 Solutions
Operations Management With Connect
Ch. 10 - It is costly to hold inventory, but inventory can...Ch. 10 - A delivery truck from a food wholesaler has just...Ch. 10 - Prob. 3CQCh. 10 - Prob. 4CQCh. 10 - Prob. 5CQCh. 10 - Prob. 6CQCh. 10 - Prob. 7CQCh. 10 - Prob. 8CQCh. 10 - Prob. 9CQCh. 10 - Prob. 10CQ
Ch. 10 - Prob. 11CQCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Prob. 3PACh. 10 - An electronics manufacturer has 25 days-of-supply...Ch. 10 - Prob. 5PACh. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - An online shoe retailers annual cost of holding...Ch. 10 - Prob. 10PACh. 10 - Prob. 11PACh. 10 - Prob. 12PACh. 10 - Prob. 13PACh. 10 - Prob. 14PACh. 10 - Prob. 15PACh. 10 - Prob. 16PACh. 10 - A retailer has annual sales of 500,000 and an...Ch. 10 - Prob. 18PACh. 10 - Prob. 19PACh. 10 - Prob. 1CCh. 10 - Prob. 3CCh. 10 - Prob. 4C
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- When a retailer places large order of inventory: a. Ordering costs reduces and holding costs increases b. Ordering costs reduces and holding costs decreases c. Ordering costs increases and holding costs increases d. Ordering costs increases and holding costs decreasesarrow_forwardwhich of the following is NOT a carrying inventory select one a.all of these b.caital costs c.purchase cost d.storage cost e.none of thesearrow_forwardAll of the following statements concerning shortage costs are true Except: Shortage costs include loss of goodwill, loss of a sale, loss of a customer, loss of profits, and late penalties Shortage costs are difficult or impossible to measure with any accuracy High shortage costs favor small inventories It is the cost of having no items in the inventory when it is needed by customersarrow_forward
- Calculate how many of each packet should the store order to maximize the revenue associated with information packets, and what is the store’s expected revenue. WITHOUT EXCELarrow_forwardIs proper cost of storage is necessary? 1-True 2-Falsearrow_forwardA local bookstore turns over its inventory once every three months. The bookstore’sannual cost of holding inventory is 36 percent. What is the inventory holding cost (in $)for a book that the bookstore purchases for $10 and sells for $18?arrow_forward
- Which one of the following represent FIFO method of inventory evaluation? a. Old merchandise is sold first b. Average number of goods are sold c. Old items remain in inventory d. New merchandise is sold firstarrow_forwardIn the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few inventory items would be classified as: O a) A items b) B items c) C items d) e) B items plus C items A items plus B itemsarrow_forwardThe total stockout cost = $ enter your response here. (Enter your response as a whole number.)arrow_forward
- Explain why a proper cutoff of purchases and sales is heavilydependent on the physical inventory observation. What information should be obtainedduring the physical count to make sure that cutoff is accurate?arrow_forwardIn inventory management, high holding costs calls for high inventory levels. A.True B.Falsearrow_forwardwhat is an example of a latent demandarrow_forward
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