Operations Management
2nd Edition
ISBN: 9781260484687
Author: CACHON, Gerard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 12, Problem 7CQ
Summary Introduction
To identify: The way the demand must change.
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X1=210
X2=3
I need a clear step by step answer please (not on excel)
The EOQ minimizes the sum of the ordering cost and which of the following costs?a. Stockout cost c. Purchasing costb. Holding cost d. Quality cost
If EOQ = 289 units, S = $100, and H = $1 per unit per month, what approx. annual demand (D) level would the EOQ model best fit? Pick the closest answer option. EOQ = Sq root of [(2D*S)/H] D = annual demand in units S = cost of placing 1 order; H = cost of holding 1 unit of that item in inventory for 1 year
3596 units
3540.00 units
5011 units
4510 units
Chapter 12 Solutions
Operations Management
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- Ti Which of the following statements about the basic EOQ model is true? O a. If the carrying cost were to increase, the EOQ would fall. O b. If annual demand were to double, the number of orders per year would increase. O c. If the ordering cost were to double, the EOQ would rise. O d. If annual demand were to double, the EOQ would increase. O e. All of these. PAGE NEarrow_forwardWhich of the following statements is/are true regarding EOQ? a. At EOQ, total inventory cost is at the minimum amount. b. At EOQ, total ordering cost is at the minimum amount. c. At EOQ, total carrying cost is at the minimum amount.d. All of the above.arrow_forwardX1=210 X2=3 I need a clear step by step answer please :)arrow_forward
- In the basic EOQ model, if annual demand doubles, the EOQ will O a. increase by about 41.42 percent O b. decrease by 48.42% O c. double O d. None of these O e. be about 70.7 percent of its previous amountarrow_forwardDuring the last 5 weeks, demands for a certain SKU at a retailer were 7 units (5 weeks ago), 4 units, 4 units, 4 units, and 5 units (last week). The retailer uses a period review model with order-up-to level 71 units, a review period of 2 weeks, and the lead time is 11 weeks. It is time to order. How much should the retailer order?arrow_forwardAt Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to replenish stock is $75, and the annual cost of holding is $6.00 per book. Stock is received 6 working days after an order has been placed. No backorder is allowed. Assume 250 working days a year. **(Enter your response rounded to the nearest whole number.)** Dot Com's optimal order quantity is ______ books. What is the optimal number of orders per year? What is the optimal enterable quotation in working days quotation between orders? What is the demand during the lead time? What is the reorder Point? What is the inventory position immediately after an order has been placed?arrow_forward
- 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?arrow_forwardA customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling for what price per share at expiration?arrow_forwardPlease do not give solution in image format thanku Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 2, 750 rolls. The cost per roll is 500$, 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_forward
- The injection molding department of a company uses an average of 30 gallons of special lubricanta day. The supply of the lubricant is replenished when the amount on hand is 170 gallons. It takesfour days for an order to be delivered. Safety stock is 50 gallons, which provides a stockout risk of9 percent. What amount of safety stock would provide a stockout risk of 3 percent? Assumenormality.arrow_forwardMedtronic sells medical devices. The company enjoys many growth opportunities, and so it measures its inventory holding cost at the rate of 25% per year. It currently turns over its inventory 3 times per year. Its gross margin (the difference between revenue and cost) as a percentage of its revenue is an enviable 65%. a. For an item that costs Medtronic $600 to produce, what would be the cost ($s) to hold this item for one year in inventory? b. For an item that costs Medtronic $350 to produce, what is the cost to hold it in inventory ($s)? (Assume it remains in inventory for the average amount of time for the company.)arrow_forwardin a standard ABC analysis, 50 to 60 percent of the number of items in inventory but only about 10 15 percent the annual dollar value representarrow_forward
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