EBK PRODUCTION AND OPERATIONS ANALYSIS
7th Edition
ISBN: 8220102480681
Author: Olsen
Publisher: WAVELAND
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Chapter 8.2, Problem 10P
Summary Introduction
Interpretation:The MRP calculation for the valves is to be determined.
Concept Introduction:
The optimal order policy is known as economic order quantity (EOQ) which is used to order the different quantities in such way that minimizes the holding cost and ordering cost.
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Students have asked these similar questions
6. The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is
$40.00. It costs $50.00 to place an order for SKU 005, and the user of SKU 005 has a per year
inventory carrying cost of 25% of unit cost. Assume 250 working days in the year where SKU 005
is used. (Noteshaper: Scenario #26)
а.
What is the combined annual holding and ordering cost of an order size of 200 units for
SKU 005?
b.
How many of SKU 005 should be ordered, to minimize combined ordering and holding
costs?
c. The vendor who sells SKU 005 has just offered a 5% discount for orders of 500 or more.
Now how many should be ordered?
d. Once the purchasing manager for SKU 005 places an order, the vendor requires 7
working days to deliver that order. What should be the purchasing manager's reorder
point?
Basic EOQ Model
Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about
2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of
capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The
company operates 360 days per year and Item X is received 9 days after placement of order.
How many units of Item X should be ordered each time? *
O 94 units
2,000 units
O 95 units
O 100 units
Which of the following is not an acceptable method of applying the LCNRV? Select one: a. Group inventory items b. Individual item c. Total of the inventory d. Inventory location
Chapter 8 Solutions
EBK PRODUCTION AND OPERATIONS ANALYSIS
Ch. 8.1 - Prob. 1PCh. 8.1 - Prob. 2PCh. 8.1 - Prob. 3PCh. 8.1 - Prob. 4PCh. 8.1 - Prob. 5PCh. 8.1 - Prob. 6PCh. 8.1 - Prob. 7PCh. 8.1 - Prob. 8PCh. 8.1 - Prob. 9PCh. 8.2 - Prob. 10P
Ch. 8.2 - Prob. 11PCh. 8.2 - Prob. 12PCh. 8.2 - Prob. 13PCh. 8.2 - Prob. 14PCh. 8.2 - Prob. 15PCh. 8.2 - Prob. 16PCh. 8.2 - Prob. 17PCh. 8.2 - Prob. 18PCh. 8.2 - Prob. 19PCh. 8.2 - Prob. 20PCh. 8.2 - Prob. 21PCh. 8.2 - Prob. 22PCh. 8.3 - Prob. 23PCh. 8.3 - Prob. 24PCh. 8.3 - Prob. 25PCh. 8.4 - Prob. 26PCh. 8.4 - Prob. 27PCh. 8.4 - Prob. 28PCh. 8.4 - Prob. 29PCh. 8.5 - Prob. 30PCh. 8.5 - Prob. 31PCh. 8.5 - Prob. 32PCh. 8.5 - Prob. 33PCh. 8.5 - Prob. 34PCh. 8.6 - Prob. 35PCh. 8.6 - Prob. 36PCh. 8.6 - Prob. 37PCh. 8.6 - Prob. 38PCh. 8.6 - Prob. 39PCh. 8.6 - Prob. 40PCh. 8 - Prob. 41APCh. 8 - Prob. 42APCh. 8 - Prob. 43APCh. 8 - Prob. 44APCh. 8 - Prob. 45APCh. 8 - Prob. 46APCh. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51AP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Hh1.arrow_forwardProduction Company Universal Controlsmanufactures control units. Their new models areeI Argon I and eI Argon II. To make each unit ofArgon I, use 6 meters and 3 controllers. For fa-craft each unit of Argon II, they use 10 meters and Scontrollers. The company receives a total of 760 me-managers and daily controllers of their suppliers.How many units of each model can you produce?seriously? Assume that all parts are used. Note: Solve freely # OF ARGON UNITS I # OF ARGON UNITS IIarrow_forwardThe ROP is an important input in determining the EOQ. True Falsearrow_forward
- 18arrow_forwardA local outdoor vegetable stand has exactly 1,000 square feet of space to displaythree vegetables: tomatoes, lettuce, and zucchini. The appropriate data for theseitems are given in the following table.ItemTomatoes Lettuce ZucchiniAnnual demand 850 1,280 630(in pounds)Cost per pound $0.29 $0.45 $0.25The setup cost for replenishment of the vegetables is $100 in each case, and thespace consumed by each vegetable is proportional to its costs, with tomatoes requiring 0.5 square foot per pound. The annual interest rate used for computingholding costs is 25 percent. What are the optimal quantities that should be purchased of these three vegetables?arrow_forwardThe fixed quantity version of EOQ compares and contrasts with the fixed interval version. Where will each of the scenarios be used?arrow_forward
- Consider the following information. PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Q = 60, LT= 3 weeks, Safety Stock = 5 1 70 70 PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Planned Order Releases 1 70 70 100 2 0 > X WEEK 3 40 Compute the planned order releases and projected on-hand inventory for component part X. Round your answers to the nearest whole number. If your answer is zero, enter "0". 2 0 4 0 100 WEEK 3 40 5 160 60 4 0 40 0 X 5 160 Check My Work -60 0arrow_forwardNewpaper sales data suggest that 20% of the days, 80 papers are sold; 40% of the days, 90 papers are sold; and the remaining days, 100 papers are sold. Given the vendor plans to stock 90 each day, what approx. expected CSL is the vendor targeting? 60% 36% 57% 65%arrow_forwardOMG Corp.'s order quantity for Material T is 5,000 lbs. If the company maintains a safety stock of T at 500 lbs., and its order point is 1,500 lbs., what is the lead time assuming daily usage is 50 lbs.? a. 30 days b. 10 days c. 100 days d. 20 daysarrow_forward
- Economic order quantity (Q*) is 4,000 units. Annual demand (D) is 12,000 units. Find number of orders per year (N*) and time between orders (T*) in years. Group of answer choices N*=3 times per year, T* cannot be calculated N*=0.33 times per year, T*= 0.33 weeks N*=17.3 times per year, T*= 3 years N*=3 times per year, T*= 0.33 years N*=3 times per year, T*= 3 yearsarrow_forwardPlease do not give solution in image format thanku What are order cycle costs if annual demand is 8,000 units, with the following order quantities and annual order cost is $97? a. Order quantity of 1,000 = b. Order quantity of 500 = C. Order qty of 8,000 =arrow_forwardThe EOQ model isa) not very useful in practice since the assumptions areunrealisticb) finds the optimal safety stockc) is quite useful, due to the fact that the optimum is quite flatd) depending on the standard deviation of the demande) has an impact of the re-order-pointarrow_forward
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