Rocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 30% of the purchase price of the tires per year. The purchase price is $21 per tire if fewer than 200 tires are ordered, $16 per tire if 200 or more-but fewer than 5,000-tires are ordered, and $14 per tire if 5,000 or more tires are ordered. a) How many tires should Rocky Mountain order each time it places an order? Rocky Mountain's optimal order quantity is 5000 units (enter your response as a whole number). b) What is the total cost of this policy? Total annual cost of ordering optimal order size = $ (round your response to the nearest whole number).
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- Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year.The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000- tires a re ordered, and $17 per tire if I ,000 or more tires areordered.a) How many tires should Rocky Mountain order each time it places an order?b) What is the total cost of this policy?Parasol Systems sells motherboards for personal computers. For quantities upthrough 25, the firm charges $350 per board; for quantities between 26 and 50,it charges $315 for each board purchased beyond 25; and it charges $285 eachfor the additional quantities over 50. A large communications firm expects torequire these motherboards for the next 10 years at a rate of at least 140 peryear. Order setup costs are $30 and holding costs are based on an 18 percentannual interest rate. What should be the size of the standing order?
- Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order? Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?1. David and Beth Sheba run a health food store. Their top selling item is called Heavenly Kelp. The annual demand for this is 3200 units, and demand is constant throughout the year. The cost of placing an order is $100, while the holding cost per unit per year is $4. How many orders per year should be placed if they wish to minimize their total cost ? If you want to be eligible for partial credit, give an idea as to how you arrived at that number?Hayes electronics assumed with certainty that the ordering cost is $450 per order and the inventory carrying cost is $170 per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters as follows: (a) both ordering cost and carrying cost are 10% less that originally estimated, (b) both ordering cost and carrying cost are 10% higher than originally estimated, (c) ordering cost is 10% higher and carrying cost is 10% lower than originally estimated, and (d) ordering cost is 10% lower and carrying cost is 10% higher than originally estimated. Determine the optimal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values.
- Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 50 cases. Assume Millennium Liquors operates 52 weeks in a year. Millennium purchases each case for $100, there is a $260 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 20 percent. If Millennium is restricted to ordering in multiples of 100 cases (e.g., 100, 200, 300, etc.), how many cases should it order to minimize its annual ordering and holding costs? (round to the nearest integer)JAL Trading is a Hong Kong manufacturer of electroniccomponents. During the course of a year it requires container cargo space on ships leaving Hong Kong bound forthe United States, Mexico, South America, and Canada.The company needs 280,000 cubic feet of cargo space annually. The cost of reserving cargo space is $7000 and thecost of holding cargo space is $0.80/ft3. Determine howmuch storage space the company should optimally order,the total cost, and how many times per year it should placean order to reserve spacePingu Company manufactures winter jackets. Setup costs are $2.00. Penguin manufactures 4,000 jackets evenly throughout the year. Using the economic order quantity approach, the optimal production run would be 200 when the cost of carrying one jacket in inventory for one year is 0.40. The given solution is this: 200 = 2*setup cost* Annual Demand / Carrying cost200 = 2*2*4000/ Carrying cost40000 = 16000 / Carrying costCarrying cost = 16000 / 40000Carrying Cost = 0.4 Hence, the cost of carrying one jacket in inventory for one year is 0.4 QUESTION: How did you get the 40,000 (that was divided to 16,000)?
- A company would like to classify its inventory systems using ABC Inventory classification system. The rules for ABC dassification 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 class inventory itemsThe inventory items are XYZ1, XYZ2, XYZ3and respectively. The Annual demands (units per year) for these items are 290,457159, and 577 respectively. Also, the corresponding per unit prices are 19 33, 126and respectively measured in OMR. Which items (among XYZ1, XYZ2, XYZ3, and XYZ4) are classified as Adass inventoryA store sells 100,000 tablet PCs every year. Each tablet PC costs $(159) and the store has an annual holding cost of (39)%. a. For what fixed cost per order would an order size of 50,000 units be optimal? b. For what fixed cost per order would an order size of 1,000 units be optimal? c. What are the annual total inventory costs for these policiesAAA auto supply store sells snow tires which are ordered every Friday to meet next week's demand. The sales price for the most popular size is $50 per tire and its cost for AAA is $35. If too many tires are ordered AAA incurs an inventory carrying cost of $2 per tire. If AAA is out of stock, it forgoes the profits from missed sales. AAA has the option to order 100, 150, or 200 tires to meet next week's demand which can be either 100, 150, or 200 tires.Based on its historical demand distribution, assume that AAA Inc. has determined the followingprobability information: P(100) = 0.4, P(150) = 0.3, and P(200) = 0.3 e. Which alternative should be chosen based on the minimax regret criterion? f. Which alternative should be chosen using the expected monetary value (EMV) criterion? g. What is the expected value under perfect information (EVPI)? Show Work