OPERATIONS MANAGEMENT LL PACKAGE
11th Edition
ISBN: 9781323592632
Author: KRAJEWSKI
Publisher: Pearson Custom Publishing
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Chapter C, Problem 9P
Summary Introduction
Interpretation: The ordering policy that could be recommended.
Concept Introduction: Ordering optimum size (creating no additional or shortage of materials in stock) at minimum ordering cost is EOQ.
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As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost, expressed as a percentage of average inventory value, is 20 percent. Your supplier has provided the following price schedule:Minimum Order Quantity Price per Unit1 $2.50200 $2.40300 $2.251,000 $2.00What ordering policy do you recommend?
I only need help with part E please....
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 50 cars per month. The cars cost $80 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%.
(a)
Determine the economic order quantity and total annual cost (in $) under the assumption that no backorders are permitted. (Round your answers to two decimal places.)
Q*= TC=$
(b)
Using a $45 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost (in $) for the model racing cars. (Round your answers to two decimal places.)
Q*= TC=$
(c)What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop is open for business 300 days per year. (Round your answer to two decimal places.)
days
(d)Would you recommend a…
Please show work so I can understand it.
A company decides to establish an EOQ for an item. The annual demand is 200,000 units. The ordering costs are $40 per order, and inventory-carrying costs are $16 per unit per year.
Calculate the following:
(a). The EOQ in units.
(b). Number of orders per year.
(c). Annual ordering cost, annual holding cost, and annual total cost
Chapter C Solutions
OPERATIONS MANAGEMENT LL PACKAGE
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