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 14PA
Summary Introduction
To determine: The days-of-supply of inventory.
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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
Most inventory models attempt to minimize
a. The likelihood of stockout
b. None of these
c. The numbers of orders placed
d. Total inventory-based cost
e The number of items ordered
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?
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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- Give typed solution and explanation of all subparts Don't upload type of photos Kamran Paint Company uses 60,000 gallons of pigment per year. The cost of ordering pigment is Tk.200 per order, and the cost of carrying the pigment in inventory is Tk.1.00 per year. The firm uses pigment at a constant rate every day throughout the year.? p =TK,s a. How much pigment should the firm order every time to minimize on total costs? b. Calculate the total cost of the plan? C. Determine the total number of orders suggested by the plan. d Assuming that it takes 20 days to receive an order once it has been placed, determine the level of pigment storage at which the firm has to place the next order of pigment. e. What are the average and maximum values of inventory for the firm?arrow_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_forwardEdwarldo’s Manufacturing uses 2,400 units of a product per year on a continuous basis. The product Carrying Cost are $60 per year and Ordering Cost are $250. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory. Show Computations and Explanations. A. Calculate the Economic Order Quantity (round up the answer to the nearest whole unit) (Format: 111) B. Calculate the Total Cost per year to order and carry this item. (Format: 1,111) C. Their supplier has notified the company that if they increase their order quantity by 58 units, they will give the company a discount. Calculate the Dollar Discount that the company will have to at least give to Edwarldo’s Manufacturing to be indifferent. (Format: 111)arrow_forward
- A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling for what price per share at expiration?arrow_forwardA store has collected the following information on one of its products:Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a. If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?arrow_forwardPlease do not give solution in image format thanku A distributor of computer monitors purchases the monitors from an overseas supplier under a continuous review system. The average demand for a popular computer monitor is normally distributed with a mean of 50 units a day and a standard deviation of 10 units a day. It costs $75 to process each order and there is a 16 day lead time. The holding cost for each monitor is $20 per year and the distributor wishes to maintain a 90% service level. The distributor operates 300 days in a year. Use the information in Scenario 9.10. If lead-time increases by nine days, what is the reorder point needed to maintain a 90% service level? Group of answer choices greater than 1,000 units but less than or equal to 1,250 units greater than 1,250 units less than or equal to 750 units greater than 750 units but less than or equal to 1,000 unitsarrow_forward
- Please do not give solution in image format thanku Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 2, 750 rolls. The cost per roll is 500$, 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.)arrow_forward3. (Ch9) A store has collected the following information on one of its products: Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a. If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point? b. The firm decided to change to the periodic review system to control the item's inventory. For the most recent review, an inventory clerk checked the inventory of this item and found 300 units. There were no scheduled receipts or backorders at the time. How many units should be ordered? (HINT: Use the EOQ model to derive P, the time between reviews.)arrow_forwardwhat is an example of a latent demandarrow_forward
- 13. Which of the following orders is most useful to short sellers who want to limit their potential losses? a. limit order b. discretionary order c. limit loss order d. stop buy order e. none of thesearrow_forwardCalculate 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_forwardGive typed full explanation If a purchase discount is taken: I. there is a saving in purchase cost. II. ordering costs are reduced. III. carrying costs are increased. IV. there is not necessarily a net saving.arrow_forward
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