Loose Leaf for Operations Management in the Supply Chain: Decisions and Cases 7e
7th Edition
ISBN: 9781260151954
Author: SCHROEDER, Roger G
Publisher: McGraw-Hill Education
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Chapter 14, Problem 2P
The Grinell Machine Shop makes a line of metal tables. Some of these tables are carried in finished goods inventory. A particular table has the following characteristics:
Sales = 300 per year
Setup cost = $1200 per setup (this includes machine setup for all the different parts in the table)
Carrying cost = 20 percent per year
Item cost = $25
- a. How many of these tables should be made in a production lot?
- b. How often will production be scheduled?
- c. What factors might cause the firm to
schedule a lot size different from the one you have computed?
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Nico's Manufacturing uses 2,400 units of a product per year on a continuous basis. The product carrying costs are $60 per year and ordering costs are $250 per order. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory.
1. Calculate the economic order quantity (round up to the nearest whole unit)
2. Calculate the total cost per year to order and carry this item.
3. Their supplier has notified the company that if they increase their order quantity by 58 units they will give the company a discount. Calculate the dollar discount that the company will have to at least give to Nico's Manufacturing to be indifferent.
Samantha Ross is the procurement manager for the headquarters of a large Financial company chain with a central inventory operation. Ross’ quick-moving inventory item has a demand of 7,000 units per year. Each unit cost $120, and the inventory holding cost is $15 per unit per year. The average ordering cost is $31 per order. It takes about 6 days for an order to arrive. (This is a corporate operation, and there are 250 working days per year.)
a) What is the EOQ?
b) What is the average inventory if the EOQ is used?
c) What is the optimal number of orders per year?
The Grinell Machine Shop makes a line of metal tables. Some of these tables are carried in finished goods inventory.A particular table has the following characteristics:Sales = 300 per yearSetup cost = $1200 per setup (this includes machinesetup for all the different parts in the table)Carrying cost = 20 percent per yearItem cost = $25a. How many of these tables should be made in a production lot?b. How often will production be scheduled?c. What factors might cause the firm to schedule a lot size different from the one you have computed?
Chapter 14 Solutions
Loose Leaf for Operations Management in the Supply Chain: Decisions and Cases 7e
Ch. 14.S - eXcel Suppose that for problem 1 in the chapter,...Ch. 14.S - Prob. 2PCh. 14.S - For problem 2 in the chapter, suppose the Grinell...Ch. 14.S - A producer of electronic parts wants to take...Ch. 14 - Identify the different types of inventories (raw...Ch. 14 - Why are stockout costs difficult to determine?...Ch. 14 - What is the difference between a requirements...Ch. 14 - Compare and contrast the management of finished...Ch. 14 - For a given service level, why does a P system...Ch. 14 - Under what circumstances might CPFR be useful, and...
Ch. 14 - Prob. 7DQCh. 14 - What is the appropriate role of inventory turnover...Ch. 14 - Suppose you are managing a chain of retail...Ch. 14 - The Always Fresh Grocery Store carries a...Ch. 14 - The Grinell Machine Shop makes a line of metal...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - Prob. 4PCh. 14 - The famous Widget Company sells widgets at the...Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - An electronics retailer carries a particular...Ch. 14 - An electronics retailer carries a particular...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - eXcel 13. The Cover-up Drapery Company carries...Ch. 14 - Suppose you are the supplier of the Cover-up...
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