The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

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Answer 1

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Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

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Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 10,821 units per year. JTP purchases these tires from a supplier. The ordering cost is $109 per order and the holding cost is $14.6 per tire per year. The supplier always delivers the shipment within 13 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the number of orders per year if JTP uses an order quantity of 1,728 tires? Use at least 4 decimal places.

A restaurant uses 5,000 quart bottles of ketchup each year. The ketchup costs $3.00 per bottle and is served only in whole bottles because its taste quickly deteriorates. The restaurant figures that it costs $10.00 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes 3 weeks for an order to arrive. The restaurant operates 50 weeks per year. The restaurant would like to use an inventory system that minimizes inventory cost. The restaurant has figured that the most economical order size or EOQ is approx. 409 (rounding up the decimals). Suppose that things have become uncertain and that customer demand is no more constant. Customer demand is now normally distributed with mean being the same as given in the problem description and standard deviation = 30 units per week. The supply source is still very reliable and as a result the lead time is constant. Find out the safety stock needed to achieve 95% customer service level. O 55 65 075 85 None of…

A grocery store company specializing in rare and expensive foods is considering operating under a backorder policy for a particular kind of Bel- gian cheese. The company currently operates with no backorders. It costs the company $75 to place an order with the Belgian manufacturer, and pays $1500 per wheel of cheese, with a 20% annual holding cost per wheel. De- mand for the cheese is on average 1 wheel of cheese per week. The company operates the store 50 weeks per year. (a) What is the economic order quantity that minimizes yearly inventory cost (with no backorders)? (b) What is the total cost to operate this inventory policy? Page 3 of 8 (c) The company proposes allowing backorders. It will compensate cus- tomers by providing them a discount and promising home delivery. The company estimates the backorders will cost $680 per wheel of cheese. What is the new economic order quantity and planned backorder quan- tity under the new policy? (d) What is the total cost of the backorder…

Answer 2

Question

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

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Answer 3

Question

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

Answer 6

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

Answer 7

Chapter 12, Problem 5PA

a)

Summary Introduction

To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

Answer 8

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

Answer 9

b)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs.

Answer 10

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

Answer 11

c)

Summary Introduction

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

Answer 12

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

Answer 13

d)

Summary Introduction

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

Answer 14

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

Answer 15

e)

Summary Introduction

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 12 - Which of the following is NOT an assumption of the...Ch. 12 - Prob. 2CQ Ch. 12 - Prob. 3CQ Ch. 12 - If the order quantity doubles but the flow rate...Ch. 12 - Prob. 5CQ Ch. 12 - Prob. 6CQ Ch. 12 - Prob. 7CQ Ch. 12 - Prob. 8CQ Ch. 12 - Prob. 9CQ Ch. 12 - Prob. 1PA

The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

Solution Summary: The author calculates the sum of the annual ordering cost and holding costs.

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To determine: The Kg that must be ordered from the supplier to minimize the sum of ordering and holding costs.

To determine: The sum of the annual ordering cost and holding costs.

To determine: The sum of the annual ordering cost and holding costs per kg of dye.

To determine: The annual cost of EOQ expressed as a percentage of the annual purchase cost.

To determine: The sum of the annual ordering cost, purchase cost, and holding costs if the company takes advantage of the discount and compare the earlier total cost.

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Chapter 12 Solutions