OPERATIONS MANAGEMENT (LL)-W/ACCESS
17th Edition
ISBN: 9781260037821
Author: CACHON
Publisher: MCG
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Chapter 10, Problem 9CQ
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To determine: Whether the given statement is true or false.
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Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2,700 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $9 per unit of average inventory. Every time an order is placed for more item X, it costs $6.
a. Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.)
b. What is the annual cost for ordering item X? (Round your answer to 2 decimal places.)
c. What is the annual cost for storing item X? (Round your answer to 2 decimal places.)
Inventory holding costs are the costs of storing products until they are purchased or shipped to customers.; True or False
The Vendor MI is a special concept of restocking and replenishing the inventory that originated in retail business, the line of business where stock availability is a significant if not a crucial factor of company´s success. With VMI, the vendor takes responsibility for inventory management at the buyer side. Select one: a. False b. True
Chapter 10 Solutions
OPERATIONS MANAGEMENT (LL)-W/ACCESS
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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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Which of the following statements is false? a. Ordering in smaller lot sizes lead to lower inventory holding costs. b. Seasonal inventory is stored to cater predictable surge in demand. c. Cycle inventory is the average amount of inventory used to satisfy demand between replenishments. d. Safety inventory is kept when the demand is less than supply.arrow_forwardTemporary storage includes only the storage of product necessary for basic inventory replenishment. Select one: a. False. b. True.arrow_forwardIn inventory management, high holding costs calls for high inventory levels. A.True B.Falsearrow_forward
- If the order quantity doubles but the flow rate remains constant, what happens to theaverage amount of time a unit spends in inventory?a. Decreases by more than 50 percent d. Increases by 50 percentb. Decreases by 50 percent e. Increases by more than 50 percentc. Remains unchangedarrow_forwardA coffee shop consumes 350 lbs of coffee per week at a steady rate. The coffee shop buys coffee from a supplier at the cost of $10 per lb, and ordering cost of $5 per order. The supplier takes 8 days to deliver an order (assume that 1 week = 7 days). What should be the reorder point (in pounds) for the coffee shop (i.e., at what level of inventory it should place an order with the supplier).arrow_forwardWith a normal demand and normal lead-time, increasing the order lead-time results in which of the following? Lower expected costs. Higher service levels. Higher stockout probability. All of the above.arrow_forward
- Assuming constant annual demand for an item, increasing its orderquantity: A. Increases the number of orders placed per year.B. Increases the total annual purchasing cost.C. Increases the total annual inventory carrying costs.D. Decreases the number of orders placed per yeararrow_forwardThe EOQ is optimal because it a. minimizes the total inventory cost. b. minimizes the ordering cost of inventory. c. minimizes the holding cost of inventory. d. maximizes the on-hand inventory. e. does none of these.arrow_forwardIf a company "A" has an Inventory Turnover of 6.20 times while their competitor Company "B" has an Inventory Turnover of 4.54 times this suggests that company "A" does a better job of managing their inventory. True or falsearrow_forward
- Inventory carrying costs differ from inventory holding costs when: * The owner of the inventory does not own the warehouse. The item is not perishable. None of the above The item is not moved from one place of the storage area to another.arrow_forwardPlease do not give solution in image format thanku Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 2, 750 rolls. The cost per roll is 500$, 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_forwardAre the following statements true Or false; 1) Pipe line inventory never depends on ordered quantity. 2) Reorder point is the level of inventory at which an order should be Placedarrow_forward
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