Operations Management
2nd Edition
ISBN: 9781260484687
Author: CACHON, Gerard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 10, Problem 3PA
Summary Introduction
To determine: The annual inventory turns.
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10.1 An SKU costing $10 is ordered in quantities of 500 units, annual demand is 5200 units,
carrying costs are 20%, and the cost of placing an order is $50. Calculate the following:
a. Average inventory.
b. Number of orders placed per year.
c. Annual inventory-carrying cost.
d. Annual ordering cost.
e. Annual total cost.
Annual demand 2,400 units Unit price (`) 2.40 Ordering cost (`) 4.00 Storage cost 2% p.a. Interest rate 10% p.a. Lead time ½ month Calculate EOQ, reorder level and total annual inventory cost. How much does the total inventory cost vary if the unit price is changed to $ 5?
Typed and correct answer please. I ll rate accordingly.
Chapter 10 Solutions
Operations Management
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. 12CQCh. 10 - Prob. 13CQCh. 10 - Prob. 14CQCh. 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 - Prob. 9PACh. 10 - Prob. 10PACh. 10 - Prob. 11PACh. 10 - Prob. 12PACh. 10 - A retailer has annual sales of 500,000 and an...Ch. 10 - An online shoe retailers annual cost of holding...Ch. 10 - Prob. 15PACh. 10 - Prob. 16PACh. 10 - Prob. 17PACh. 10 - Prob. 18PACh. 10 - Prob. 19PACh. 10 - Prob. 1CCh. 10 - Prob. 3CCh. 10 - Prob. 4C
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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.arrow_forwardAt Matthews Car Repair, customer demand for a certain brand of motor oil is normally distributed with a mean of 15 gallons and a standard deviation of 6 work-days. To be 95% sure that Compact Car Repair will not run out of oil, we should reorder when motor oil in stock is less than _______ gallons. a. 24.9 b. 22.6 c. 23.7 d. 20arrow_forward(Please solve all part and do not give solution in image format thanku)arrow_forward
- QUESTIONS 1-6. Suppose the ABC Snack Company sells a Potato Chip product that has a constant annual demand rate of 3,600 bags of chips. Each bag costs ABC $3.00, and each order costs $20.00. Holding costs are 25% of the value of inventory. ABC has 250 working days per year, and the lead time is 5 days. Identify the following aspects of inventory policy. (b) (c) Question 2. What is the reorder point (in days)? Question 3. How long is the cvcle time (T, in days)?arrow_forwardI NEED IT TODAY, 1. B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is 200 cameras per week. Each time that B&H places an order for a new shipment of cameras, it must pay $80 in fixed processing fees. A camera costs B&H $60 to purchase. The cost for B&H to hold a camera in its store for one week is $4. Assume that the lead time for the delivery of a camera is 0 weeks.a. Suppose that B&H places orders for cameras in quantities of 50 cameras at a time and places a new order for cameras each time that it runs out. Draw a graph showing the number of cameras that B&H has on-hand in inventory at each point in time up until the time when it places its fourth order. Label the points in time at which B&H places a new order. Assume that B&H places its first order for 50 cameras on day 0.b. Suppose again that B&H places orders for 50 cameras at a time. What will be B&H’s average holding costs per week? What will…arrow_forwardGiven Information Service Level - 95% (z value= 1.6649) Order Cost - $125Order Cycle (weeks) - 4, 5, 6, 7, 8Lead Time (weeks) - 2 weeksOperating Time - 52 weeks Standard deviation = 69.3237 Variable Holding Cost - 12.019% Fixed Holding Cost - 1,659,317.307 QUESTION: Compute for annual variable holding cost. Formula Given: (EOQ/2) x (Unit cost x Percentage Value of Inventory)arrow_forward
- Please do not give solution in image format thankuarrow_forwardPlease do not give solution in image format thanku Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a highspeed modem priced at $360 per unit, the average weekly demand at each distribution center is 85 units. Average shipment size to each distribution center is 450 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipation inventory. Part 2 a. On average, how many dollars of pipeline inventory will be in transit to each distribution center? $enter your response here. (Enter your response as an integer.)arrow_forward10 Use the information presented in the graph to answer the following questions: Annual Cost C3 C2 Q1 You are also given the following information: Q1 =450 .Q2 = 700 C1 = 350 C2 = 750 1300 Q2 Order Quantity Which annual inventory cost component does the blue line represent? Total cost Which annual inventory cost component does the green line represent? Holding cost What is the Economic Order Quantity (EQ9) based on th Which annual inventory cost component does the red line represent? Ordering cost 220arrow_forward
- Please do not give solution in image format thankuarrow_forwardHand written plz asap... I'll rate plz fast solve it within half n hour... I'll ratearrow_forwardGreen Grass Industries Limited (GGIL) has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs, are forcing GGIL, to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such a shortage costs. Table 10 is a random sample of 20 GGIL's items. Table 10. Annual Usage by Value of a sample of GGIL's Inventory Item Number Annual Usage ($) Item Number Annual Usage ($) 1 10,600 11 2,750 2 14,000 12 1,400 3 4,000 13 3,200 4 16,000 14 2,500 5 8,100 15 110,000 1,800 16 14,800 7 84,000 17 9,500 8. 890 18 1,700 9 940 19 3,700 10 94,000 20 12,500 a) What would you recommend GGIL to do to cut back its labor cost? (Illustrate using an ABC plan). b) Item 18 is critical to continued operations at GGIL. i. How would you recommend it be classified? ii. Give the reason(s) for your answer.arrow_forward
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