10.5 An SKU has an annual demand of 10,000 units, each costing $20, ordering costs are $80 per order, and the cost of carrying inventory is 25%. Calculate the EOQ in units and then convert to dollars.
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- The john equipment company estimates its carrying cost at 15% and its ordering cost at $90 per order. The estimated annual requirement is 78,000 units at a price of $4 per unit. (i). What is the most economical no. of units to order?(ii). No. of orders to be placed in a year.(iii). About how often will an order need to be placed?For fixed order quantity inventory system, which of the following costs is increased when order size (Q) is increased? a) Setup cost b) Ordering cost c) Start-up quality cost d) Insurance cost e) Receiving inspection costIf annual sales in are 65,000 units, price per unit is $25, carrying costs are 30%, and fixed costs per order is $100, then EOQ is 1,316.56. True or False?
- Firm Tezla produces the product QuickCar. Annual demand for QuickCar is 600 units per year on a continuous basis. The product has inventory holding costs of $30 per unit per year and order costs of $300 per order. It takes 30 days to receive a shipment after an order is placed. Calculate the economic order quantity (EOQ). a. 77 units b. 110 units c. 60 units d. 44 unitsCape Fear Hospital consumed 400 boxes of bandages per week last year. The price of bandages was $80 per box, and the hospital operates 52 weeks per year. The cost of processing an order was $64, and the cost of holding one box throughout a full year was 20% of the value of the material. What is the EOQ? 407 boxes 102 boxes O 408 boxes O 57 boxesWhat are the primary trade-offs captured in the Economic Order Quantity (EOQ) Model? Inventory Cost Variable Cost of Units Revenue Fixed Cost When Placing Orders
- William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D 19,500 units/year Ordering cost S $25/order Holding cost H $4/unit/year a) The EOQ for the workbooks is (round your response to the nearest whole number).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? $__________Wood County Hospital consumes 1,500 boxes of bandages per week. The price of bandages is $36 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 20 percent of the value of the material. a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method? $ 435.37 (Enter your response rounded to two decimal places.) b. Demand is normally distributed, with a standard deviation of weekly demand of 150 boxes. The lead time is 2 weeks. Refer to the standard normal table for z-values. What safety stock is necessary if the hospital uses a continuous review system and a 95 percent cycle-service level is desired? 348 boxes. (Enter your response rounded to the nearest whole number.) What should be the reorder point? boxes. (Enter your response rounded to the nearest whole number.) pm oints
- Wood County Hospital consumes 1,000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 15 percent of the value of the material.a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method?b. Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes. The lead time is 2 weeks. What safety stock is necessary if the hospital uses a continuous review system and a 97 percent cycle-service level is desired? What should be the reorder point?c. If the hospital uses a periodic review system, with P = 2 weeks, what should be the target inventory level, T?Reorder Point Ordering: Average lead time (??⎯⎯⎯⎯⎯⎯⎯⎯)(LT¯) is 20 days, with a std. dev. (???)(σLT) of 6 days. Daily demand (?)(d) is 50 units (constant). Find safety stock (??)(SS) and reorder point (???)(ROP) for ?=2z=2. Group of answer choices SS=80.5 units, ROP=1080.5 units SS=53.7 units, ROP = 1053.7 units SS=900 units, ROP=1,900 units SS=600 units, ROP = 1,000 units SS=600 units, ROP=1,600 unitsWood County Hospital consumes 500 boxes of bandages per week. The price of bandages is $70 per box. The cost of processing an order is $60, and the cost of holding one box for a year is 15% of the value of the material. Assume 52 weeks per year. a) The hospital orders bandages in lot sizes of 900 boxes. What extra costs does the hospital incur, which it could save by applying the EOQ concept? b) Demand is normally distributed with a standard deviation of weekly demand being 100 boxes. The lead-time is 1/2 week. What safety stock is necessary if the hospital uses continuous review inventory system, and a 97% service level? What should the reorder point be?