OPERATIONS AND SUPPLY CHAIN MANAGEMENT
9th Edition
ISBN: 9781119448037
Author: Russell
Publisher: WILEY
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Chapter 13, Problem 13Q
In the production quantity EOQ model, what would be the effect of the production rate becoming increasingly large as the demand rate became increasingly small, until the ratio d/p was negligible?
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Students have asked these similar questions
In economic order quantity EOQ model, manimum level of inventory is
a. the same as the level of inventory at the time of placing an order
b. EOQ
c. Recorder point plus EOQ
d. None of the answers
e. EOQ minus recoder point
Bold Vision, Inc., must purchase toner from a local supplier. The company does not wish to carry raw material inventory and therefore only purchases enough toner to satisfy the demand of each individual batch of cartridges. Each toner cartridge requires one pound of toner. The raw material supplier offers Bold Vision a purchase discount of $2.00 per pound if the company orders at least 2,000 pounds at a time. Should Bold Vision accept this offer and alter its toner purchase quantity?
The annual demand for an item is 10,000 units. The cost to process an order is $75 and the annual inventory holding cost is 20% of item cost. What is the optimal order quantity, given the following price breaks for purchasing the item? What price should the firm pay per unit? What is the total annual cost at the optimal behavior?
Quantity
Price
1 – 9
$2.95 per unit
10 – 999
$2.50 per unit
1,000 – 4,999
$2.30 per unit
5,000 or more
$1.85 per unit
Chapter 13 Solutions
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Ch. 13.S - Prob. 1QCh. 13.S - How are steady-state results achieved in a...Ch. 13.S - Prob. 3QCh. 13 - Describe the difference between independent and...Ch. 13 - Distinguish between a fixed-order-quantity system...Ch. 13 - Discuss customer service level for an inventory...Ch. 13 - Explain the ABC inventory classification system...Ch. 13 - Identify the two basic decisions addressed by...Ch. 13 - Describe the major cost categories used in...Ch. 13 - Explain how the order quantity is determined using...
Ch. 13 - What are the assumptions of the basic EOQ model,...Ch. 13 - How are the reorder point and lead lime related in...Ch. 13 - Describe how the production quantity model differs...Ch. 13 - How must the application of the basic EOQ model be...Ch. 13 - Why do the basic EOQ model variations not include...Ch. 13 - In the production quantity EOQ model, what would...Ch. 13 - Explain in general terms how a safety stock level...Ch. 13 - Explain the difference between a single-stage...Ch. 13 - AV City stocks and sells a particular brand of...Ch. 13 - AV City (Problem 13.1) assumed with certainty that...Ch. 13 - A firm is faced with the attractive situation in...Ch. 13 - The Sofaworld Company purchases upholstery...Ch. 13 - The Wallace Stationery Company purchases paper...Ch. 13 - The Ambrosia Bakery makes calms for freezing and...Ch. 13 - The EastCoasters Bicycle Shop operates 364 days a...Ch. 13 - The Chemeo Company uses a highly toxic chemical in...Ch. 13 - The Food Place Supermarket stocks Munehkin...Ch. 13 - Kroft Foods makes cheese to supply to stores in...Ch. 13 - The Shotz Brewery produces an ale that it stores...Ch. 13 - Tradewinds Imports is an importer of ceramics from...Ch. 13 - JAL Trading is a Hong Kong manufacturer of...Ch. 13 - In Problem 12.1 in Chapter 12, the Hartley-Davis...Ch. 13 - In Problem 12-2 in Chapter 12, Carpel City orders...Ch. 13 - In Problem 12.47 in Chapter 12, Delaplane...Ch. 13 - The Paramount Paper company produces paper from...Ch. 13 - Kellys Tavern serves Shamrock draft beer to its...Ch. 13 - The daily demand for Ironcoat paint at the Top...Ch. 13 - IM Systems assembles microcomputers from genetic...Ch. 13 - IM Systems assembles microcomputers from generic...Ch. 13 - KVS Pharmacy fills prescriptions fen a popular...Ch. 13 - Food Place Market stocks frozen pizzas in a...Ch. 13 - The Mediterranean Restaurant stocks a red Chilean...Ch. 13 - The Aztec Company stock a variety of parts and...Ch. 13 - The EastCoasters Bicycle Shop stocks bikes;...Ch. 13 - Tara McCoy is the office administrator for the...Ch. 13 - The concession stand at the Shelby High School...Ch. 13 - The Instant Paper Clip Office Supply Company...Ch. 13 - The Texas Gladiators Apparel Store The Texas...Ch. 13 - Pharr Foods Company Pharr Foods Company produces a...
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- A medical facility’s demand for N95 respirators and disposable gloves is deterministic and stable at a rate of 20 respirators per day and 100 gloves per day. The distributor charges $20 per pack of 20 respirators and $10 for a pack of 25 gloves. The distributor offered the healthcare facility the following plan: whenever the medical facility places a single order for both N95 respirators and gloves, the distributor will package one pack of respirators together with two packs of gloves to minimize shipping volume. The remainder of the order of gloves will be sent in the second shipment (without any extra shipping cost), which will be timed so that the healthcare facility receives the second shipment just before it runs out of gloves inventory. The shortages are not allowed. The fixed cost of placing an order is $10 and the holding cost rate is a 20% annual interest rate (assume 365 days per year). Calculate the average annual cost for this inventory system. If the lead time from the…arrow_forwardQuantity to OrderDaily demand for a product is 10 units, with a standard deviation of 3 units. The review period is 30 days, and the lead time is 14 days. Management has set a policy of satisfying 98 percent of demand from items in stock. At the beginning of this review period, there are 150 units in inventory.How many units should be ordered?arrow_forwardZazz, a maker of a hot new MP3 player, is concerned about the availability of flash memory chips, a key component in the Zazz3 player. It is the start of April and Zazz must commit to a flash memory chip quantity for delivery in July. Each chip ordered now will cost Zazz $40. Zazz expects that demand for chips in July is normally distributed with a mean of 250,000 and a standard deviation of 200,000. If Zazz’s demand in July exceeds its regular order (the amount ordered in April) then Zazz can obtain additional units on the spot market. The spot market price for these chips in July is estimated to be $50. Chips not used in July can be salvaged in August for $36. Furthermore, there is a $1 cost to hold each chip from one month to the next (due to the opportunity cost of capital and physical storage costs). What is their UNDERAGE with respect to chips ordered in April? A) $40 B) $2 C) $50 D) $10arrow_forward
- E - Max uses the basic EOQ model to determine the order quantity . They used to buy electronics from a Korean supplier in Dubai with a lead - time of 5 days . Recently , the supplier has decided to close the warehouse in Dubai and deliver all items from Korea directly to customers in Oman with a lead time of 10 days . Under this situation , the economic order quantity will (Q^ * ) 1)double 2)None of these 3)increase , but not double 4)decrease by a factor of two 5)do remain the samearrow_forwardDiscuss the mathematical formula used in the Wilson approach to determine the Economic Order Quantity (EOQ).arrow_forwardThe O'Neil Shoe manufacturing company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special-style shoe order, the company incurs fixed cost of P2,000 for the production setup. The variable cost is P60 per pair, and each pair sells for P80. How large must the shoe order be before O'Neil will break-even?arrow_forward
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- Henrique Correa's bakery prepares all its cakes between 4 A.M.and 6 A.M.so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $8 price. The cost of baking a cake is $5,and demand is estimated to be normally distributed, with a mean of 25 and a standard deviation of 7. What is the optimal stocking level?arrow_forwardA company has estimated its economic order quantity for Part A at 3,000 units for the coming year. If ordering costs are P200 and carrying costs are P0.50 per unit per year, what is the estimated total annual usage?arrow_forwardAn online footwear firm Shoe-n-co has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation cost), and lead time is 1 week. The company wants the probability of stocking out to be no more than 5%. Assume 50 working weeks per year. What is the average inventory held at each warehouse? What is the annual inventory cost (holding + ordering) for Shoe-n-co? On average, how long does a unit of product spend in the warehouse before being sold? .. Little's law, maybe?arrow_forward
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