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2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is Pl1,080. Lead time =1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips.

2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is Pl1,080. Lead time =1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Activities/Assessments: Activity 9 Solve the following EOQ model problems: 1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used. 2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips. 3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a cost of P 135. Annual carrying costs are P 630 per bag. The bakery operates 280 days per year. Lead time = 2 weeks. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. When should the bakery order for more sugar? d. How many times per year will the bakery order for sugar? I x
Transcribed Image Text:Activities/Assessments: Activity 9 Solve the following EOQ model problems: 1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used. 2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips. 3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a cost of P 135. Annual carrying costs are P 630 per bag. The bakery operates 280 days per year. Lead time = 2 weeks. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. When should the bakery order for more sugar? d. How many times per year will the bakery order for sugar? I x
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