Optimal order quantity for Colombian coffee. Introduction: Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

Question

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Answer 1

Question

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

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Anglo American Platinum uses ABC analysis as an inventory categorisation method. The current inventory ordering policy is to order 10 000 units of an ‘A’-item inventory when the level falls to 4 500 units. Forecast demand to meet production requirements during the next year is 62 500 units. The cost of placing and processing an order relating to this inventory item is R250, while the cost of holding a unit in store is R50 per unit per year. You anticipate that both costs will be constant during the next year. Orders are received two weeks after being placed with the supplier. Assume a 50-week year and that demand is constant throughout the year. Using a quantitative analysis, appraise the optimality of the current ordering policy of the ‘A’-item inventory (Show all calculations).

Ram Roy's firm has developed the following supply, demand, cost, and inventory data. Supply Available Period Regular Time Overtime Subcontract Demand Forecast 1 30 15 5 40 2 30 15 5 45 3 30 20 5 50 Initial inventory 20 units Regular-time cost per unit $100 Overtime cost per unit $160 Subcontract cost per unit $200 Carrying cost per unit per month $4 Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. Part 2 Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is $enter your response here (enter your response as a whole number).

The Olde Town Microbrewery makes Townside beer,which it bottles and sells in its adjoining restaurant and bythe case. It costs $1700 to set up, brew, and bottle a batchof the beer. The annual cost to store the beer in inventory is$1.25 per bottle. The annual demand for the beer is 21,000bottles and the brewery has the capacity to produce 30,000bottles annually.a. Determine the optimal order quantity, total annual inventory cost, the number of production runs per year, andthe maximum inventory level.b. If the microbrewery has only enough storage space tohold a maximum of 2500 bottles of beer in inventory,how will that affect total inventory costs?

Answer 2

Question

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Answer 6

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

Answer 7

Chapter 4.5, Problem 10P

a

Summary Introduction

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

Answer 8

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

Answer 9

b

Summary Introduction

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

Answer 10

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

Answer 11

c

Summary Introduction

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

Answer 12

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Answer 13

d

Summary Introduction

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 4.4 - Prob. 1P Ch. 4.4 - Prob. 2P Ch. 4.4 - Prob. 3P Ch. 4.4 - Prob. 4P Ch. 4.4 - Prob. 5P Ch. 4.4 - Prob. 6P Ch. 4.4 - Prob. 7P Ch. 4.4 - Prob. 8P Ch. 4.4 - Prob. 9P Ch. 4.5 - Prob. 10P

Optimal order quantity for Colombian coffee. Introduction: Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

Concept explainers

Videos

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.

Want to see the full answer?

Chapter 4 Solutions

Optimal order quantity for Colombian coffee. Introduction: Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

Concept explainers

Videos

To determine: Optimal order quantity for Colombian coffee. Introduction: Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

To determine: Time duration between placement of order. Introduction: Lead time is the time between when order is placed and its production is completed.

To determine: Average annual cost of holding and set up cost Introduction: Holding cost is the cost incurred when goods are kept in warehouses without sale. Setup cost is the fixed cost which is incurred for production process.

To determine: Reorder level based on the on − hand inventory Introduction: On hand inventory is the stock of goods available to be sold to customers.

Want to see the full answer?

Chapter 4 Solutions

To determine:

Optimal order quantity for Colombian coffee.

Introduction:

Economic order quantity in the optimal inventory kept by any firm which is ideal and do not incur any additional holding cost and order cost.

To determine:

Time duration between placement of order.

Introduction:

Lead time is the time between when order is placed and its production is completed.

To determine:

Average annual cost of holding and set up cost

Introduction:

Holding cost is the cost incurred when goods are kept in warehouses without sale.

Setup cost is the fixed cost which is incurred for production process.

To determine:

Reorder level based on the on − hand inventory

Introduction:

On hand inventory is the stock of goods available to be sold to customers.