A manufacturing firm has been offered a particular component part it uses cording to the following discount pricing schedule provided by the supplier. Quantity 1-500 501-999 2 1000 Unit Price $5 $4.5 $3.9 he manufacturing company uses 10000 of the components annually. The ordering cost for ea -der is $20, and the unit holding cost is 20% of the purchase price of the component per year. What is the ontimal order quantity?

A manufacturing firm has been offered a particular component part it uses cording to the following discount pricing schedule provided by the supplier. Quantity 1-500 501-999 2 1000 Unit Price $5 $4.5 $3.9 he manufacturing company uses 10000 of the components annually. The ordering cost for ea -der is $20, and the unit holding cost is 20% of the purchase price of the component per year. What is the ontimal order quantity?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 13P

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A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)d. Which method resulted in the lowest-cost policy for this problem?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)a. What ordering policy is recommended by the Silver–Meal heuristic?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)c. What ordering policy is recommended by the least unit cost heuristic?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)b. What ordering policy is recommended by the part period balancing heuristic?
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We are given the following information for a product:Order cost $50Annual demand N(960, 3,072.49)Annual holding cost $6/item/yearShortage cost $80 per unitLead time one monthSales price $40 per unitProduct cost $30 per unita Determine the order quantity and the reorder pointunder the assumption that all demands are backordered. b Determine the order quantity and reorder point un-der the lost sales assumption.
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A manufacturing firm has gone out on bid to procure a component. Expected demand is 700 units per month. The item can be purchased from either Vendor A or Vendor B. Their price lists are shown in the table. Ordering cost is $50, and annual holding cost per unit is 30% of the item’s value. Vendor A Vendor B Quantity Unit Price Quantity Unit Price 1-499 $16.00 1-399 $16.10 500-999 15.50 400-799 15.60 1000+ 15.00 800+ 15.10 Calculate the economic order quantity. From which vendor is the optimal order quantity and what is the total annual inventory cost?
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