EBK PRODUCTION AND OPERATIONS ANALYSIS
7th Edition
ISBN: 8220102480681
Author: Olsen
Publisher: WAVELAND
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Chapter 4.7, Problem 25P
Summary Introduction
To determine:
Size of the order.
Introduction:
Aggregate planning is the technique in which planning of all inputs and output of production is planned to meet any uncertainty of demand and avoid any wastage in the process.
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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.
The Bosch factory in New Bern, NC uses dishwasher motors at a steady rate of 17308 units per year. Bosch procures
these units from a supplier at a purchase cost of $58 per unit. Bosch receives an order 26 days after it is placed.
Regardless of the number of units ordered, Bosch incurs a fixed cost of $2988 for placing, shipping, and receiving the
order. The holding cost per unit per year is 30% of the purchase cost per unit. Assume Bosch operates 364 days, 52
weeks, or 12 months per year.
Calculate the average time a unit spends in inventory between orders in DAYS for the optimal order quantity from the
problem above.
Rounding instructions
• Carry your calculations to at least 3 decimal places.
• Enter your answer rounded to one decimal place (nearest tenth).
A company would like to classify its inventory systems using ABC inventory classification system. The rules for ABC
classification are STRICTLY applied such that 80% cumulative budget is assigned to A class inventory items. The next
15% cumulative budget is assigned to B class inventory items, and Only 5% of the cumulative budget is assigned to C
class inventory items. The inventory items (SKU) are XYZ1, XYZ2, XYZ3, and XYZ4 respectively. The Annual demands
(units per year) for these items are 290, 457, and 159, and 577 respectively. Also, the corresponding per unit prices
are 19, 33, 126, and 90 respectively measured in OMR. Which items (among, XYZ1, XYZ2, XYZ3, and XYZ4) are
classified as A class inventory
Select one:
a. Only XYZ3
b. All items
c XYZ1 only
d. Both XYZ3 and XYZ4
Chapter 4 Solutions
EBK PRODUCTION AND OPERATIONS ANALYSIS
Ch. 4.4 - Prob. 1PCh. 4.4 - Prob. 2PCh. 4.4 - Prob. 3PCh. 4.4 - Prob. 4PCh. 4.4 - Prob. 5PCh. 4.4 - Prob. 6PCh. 4.4 - Prob. 7PCh. 4.4 - Prob. 8PCh. 4.4 - Prob. 9PCh. 4.5 - Prob. 10P
Ch. 4.5 - Prob. 11PCh. 4.5 - Prob. 12PCh. 4.5 - Prob. 13PCh. 4.5 - Prob. 14PCh. 4.5 - Prob. 15PCh. 4.5 - Prob. 16PCh. 4.6 - Prob. 17PCh. 4.6 - Prob. 18PCh. 4.6 - Prob. 19PCh. 4.6 - Prob. 20PCh. 4.7 - Prob. 21PCh. 4.7 - Prob. 22PCh. 4.7 - Prob. 23PCh. 4.7 - Prob. 24PCh. 4.7 - Prob. 25PCh. 4.8 - Prob. 26PCh. 4.8 - Prob. 27PCh. 4.8 - Prob. 28PCh. 4.9 - Prob. 29PCh. 4.9 - Prob. 30PCh. 4 - Prob. 31APCh. 4 - Prob. 32APCh. 4 - Prob. 33APCh. 4 - Prob. 34APCh. 4 - Prob. 35APCh. 4 - Prob. 36APCh. 4 - Prob. 37APCh. 4 - Prob. 38APCh. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43APCh. 4 - Prob. 44APCh. 4 - Prob. 45AP
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