Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 21P
A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item.
- What is the EOQ for this item?
- What is the desired safety stock?
- What is the reorder point?
- What are the cost implications if the current policy for this item is
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A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUs. Following are the characteristics of one item. Demand (D) = 64 units/week (Assume 52 weeks per year), Ordering or setup cost (S) = $50/order, Holding cost (H) = $13/unit/year, Lead time (L) = 2 weeks, Standard deviation of weekly demand = 12 units, Cycle-service level = 88 percenta. What is the EOQ for this item?
b. What is the desired safety stock?
c. What is the reorder point?
d. What are the cost implications if the current policy for this item is Q 200 and R 180?
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 48,400 units per year, an ordering cost of $3 per order, and carrying costs of $1.50 per unit.
a. What is the economic ordering quantity?
_____________Units
b. How many orders will be placed during the year?
_____________Orders
c. What will the average inventory be?
____________Units
d. What is the total cost of ordering and carrying inventory?
$__________
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 112, 500 units per year, an ordering cost of $3 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? d. What is the total cost of ordering and carrying inventory?
Chapter 9 Solutions
Operations Management: Processes and Supply Chains (11th Edition)
Ch. 9 - What is the relationship between inventory and the...Ch. 9 - Suppose that a large discount retailer with a lot...Ch. 9 - Will organizations ever get to the point where...Ch. 9 - A part is produced in lots of 1,000 units. It is...Ch. 9 - Prince Electronics, a manufacturer of consumer...Ch. 9 - Terminator, Inc. manufactures a motorcycle part in...Ch. 9 - Ruby-Star Incorporated is considering two...Ch. 9 - Haley Photocopying purchases paper from an...Ch. 9 - Prob. 6PCh. 9 - Southern Markets, Inc. is considering the use of...
Ch. 9 - New Wave Shelving’s inventory manager would like...Ch. 9 - Yellow Press, Inc. buys paper in 1,500-pound rolls...Ch. 9 - Babble, Inc. buys 400 blank cassette tapes per...Ch. 9 - At Dot Com, a large retailer of popular books,...Ch. 9 - Leaky Pipe, a local retailer of plumbing supplies,...Ch. 9 - Sam’s Cat Hotel operates 52 weeks per year, 6...Ch. 9 - Consider again the kitty litter ordering policy...Ch. 9 - In a Q system, the demand rate for strawberry ice...Ch. 9 - Petromax Enterprises uses a continuous review...Ch. 9 - In a continuous review inventory system, the lead...Ch. 9 - In a two-bin inventory system, the demand for...Ch. 9 - You are in charge of inventory control of a highly...Ch. 9 - Your firm uses a continuous review system and...Ch. 9 - A company begins a review of ordering policies for...Ch. 9 - Prob. 22PCh. 9 - The Farmer’s Wife is a country store...Ch. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - In a P system, the lead time for a box of...Ch. 9 - Suppose that Sam’s Cat Hotel in Problem 13 uses...Ch. 9 - Your firm uses a periodic review system for all...Ch. 9 - Using the same information as in Problem 21,...Ch. 9 - Wood County Hospital consumes 1,000 boxes of...Ch. 9 - A golf specialty wholesaler operates 50 weeks per...Ch. 9 - What is the EOQ and what is the lowest total cost?Ch. 9 - What is the annual cost of holding inventory at...Ch. 9 - Prob. 3AMECh. 9 - Prob. 4AMECh. 9 - Prob. 5AMECh. 9 - Prob. 6AMECh. 9 - Comment on the sensitivity of the EOQ model to...Ch. 9 - Consider the pressures for small versus large...Ch. 9 - Prob. 2VCCh. 9 - The Marker Maker© product recently experienced an...Ch. 9 - Prob. 1CCh. 9 - Prob. 2C
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