2. Calculate the economic order quantitiy. Because of the high setup cost of $60/order forproducing push lawnmowers, production is ordered in specified quantities instead of lot-for-lot.Calculate the economic order quantity for push mowers (assume independent of model; holding costare given above). This quantity will be used as the lot size for the MRP. [Hint - convert holding costgiven above to annual in this calculation.] LAWN KING PROJECTLawn King produces a couple models of push lawn mowers. A total of 60 workers are currentlyemployed to work on the assembly line. Hiring cost is $800 for each new employee, while the cost oflaying off an employee is $1200. The production strategy in current use is a one-shift-per-day levelstrategy at average demand. Differences between demand and production are balanced by inventoryand backorders. If a backorder occurs, the order is filled from the next available production run andsafety stock is consumed if needed and replenished later. Lawn King utilizes a $7/unit carrying cost permonth for inventory, and backorders have a cost of $10/unit per month. Production is estimated at 5mowers per worker per shift, and the assembly line operates 20 working days (shifts) per month. LawnKing keeps 500 mowers as safety stock, which will be the beginning inventory for September. Theregular time cost of production is $50 per lawn mower.[Hint: production = (# of workers) ( # of mowers each worker produces per shift) (# of shifts per month)]Each May an aggregate production plan is prepared for the upcoming fiscal year that starts inSeptember. The aggregate plan is used for personnel planning, inventory planning, and budgetpreparation.

EOQ is a statistical and mathematical concept used in production and operations management. It…

2. Calculate the economic order quantitiy. Because of the high setup cost of $60/order for producing push lawnmowers, production is ordered in specified quantities instead of lot-for-lot. Calculate the economic order quantity for push mowers (assume independent of model; holding cost are given above). This quantity will be used as the lot size for the MRP. [Hint - convert holding cost given above to annual in this calculation.]

2. Calculate the economic order quantitiy. Because of the high setup cost of $60/order for producing push lawnmowers, production is ordered in specified quantities instead of lot-for-lot. Calculate the economic order quantity for push mowers (assume independent of model; holding cost are given above). This quantity will be used as the lot size for the MRP. [Hint - convert holding cost given above to annual in this calculation.]

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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Lot Size: Allocated: 120 0 Safety Stock: 10 Lead Time: 3 Gross Requirements Scheduled Receipts Projected On-hand Projected Available Net Requirements Planned Order Receipts Planned Order Releases 140 1 40 100 2 40 60 3 40 20 120 Periods Disaurch 4 40 100 80 56 40 40 6 40 0 47. The situation presented in the chart above is in proper balance. If the demand in the fourth period were to be changed from 40 to 10, which of the following would be true? The on hand would reach 10 in Period 4 but no action would be recommended A recommendation to increase the scheduled receipt of 100 to 120 and to reschedule it from Period 4 to Period 3 would be made. A recommendation to reschedule the scheduled receipt of 100 for Period 4 to Period 5 and to cancel the planned order release for 120 in Period 3 would be made A recommendation to reschedule the scheduled receipt of 100 for Period 4 to Period 5 would be made with no other changes needed
XXX Company stocks part AA at its warehouse for supplying field service offices. The yearly demand for these parts is 2600 units. XXX Company estimates its annual holding cost for this item to be $ 10 per unit. The cost to place and process an order is $30. The company operates 300 days per year, and the lead time to receive an order is 10 days. The standard deviation of the demand is 15. a. Find the economic order quantity b. Find the total cost c.Determine the ROP needed if the manager wants an annual service level of 99.9 percent. 12 Z- 3.1 15
11.5 If sigma is 150 units, and the demand during the lead time is 200 units, calculate the safety stock and order point for: a. A 50% service level. b. An 85% service level.
Demand at Sharp remains at 1,000, H is still $.50, and we order 200 needlesat a time (as in Example 5 ). But if the true order cost 5 S 5 $15 (rather than $10), what is the annual cost?
Help with the following questions.
I"m having issues calculating the holding cost. For the below example problem. Use the lot sizing model to determine the total cost of the Lot-for-lot heuristic. Month Period Demand Jan. 1 110 Feb. 2 40 Mar. 3 150 Apr. 4 130 May 5 60 Jun. 6 30 Jul. 7 20 Aug. 8 30 Sep. 9 80 Oct. 10 120 Nov. 11 130 Dec. 12 100 Total 1000 Given cost parameter: Value Order cost $25 Unit cost $8 Holding cost rate (monthly) 5%
Assuming Normal Distribution, what would the optimal (s,Q) policy be for the given parameters below? Given data: Demand daily has mu = 1768, sigma = 5.37, with a unit purchased cost is $15 (annual interest rate is 20%). The order cost is $50 with a back ordering cost of $25. The order lead time is 3 days.
Peet’s Coffees in Menlo Park, California, sells Melitta Number 101 coffee filters at afairly steady rate of about 60 boxes of filters monthly. The filters are ordered from asupplier in Trenton, New Jersey. Peet’s manager is interested in applying some inventorytheory to determine the best replenishment strategy for the filters.Peet’s pays $2.80 per box of filters and estimates that fixed costs of employee timefor placing and receiving orders amount to about $20. Peet’s uses a 22 percent annualinterest rate to compute holding costs.a. How large a standing order should Peet’s have with its supplier in Trenton, and howoften should these orders be placed?
In a certain firm, the demand for their product is given as 360. The holding cost was estimated to be K0.80 while the ordering cost was K100 per order. In this firm, there are 250 working days in a year.Required; a. What is the EOQ? b. How many orders should be processed per year? c. What is the expected cycle time?d. What will be the total cost for the inventory? ACB firm produces type C fire extinguishers. They make 30 000 of these fire extinguishers per year. Each extinguisher requires one handle (assume a 300 day work year for daily usage rate purposes) the annual carrying cost is K15 per handle. The production setup cost is set at K1500 and a daily production rate of 300.Required;a) What is the optimal production order quantity? b) Determine the following;i. Imaxii. Average inventoryiii. Number of butches per yeariv. Cycle timev. Run time
Discuss the role of safety stock in the Wilson approach and its implications for inventory control.
Given: Demand is 1984 items per month. The order frequency is 8 per quarter. The reorder point is 0. What is the lot size (Q)?
Basic EOQ. This type of problem can be recognized when annual demand (D), ordering cost (S), andholding or carrying cost per unit (H) are given. Use Formula 13–2 for order quantity, Formula 13–1for total cost, and D/Q for number of orders a year.A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at asteady rate during the 240 days a year that the plant operates. Annual holding cost is $3 per chip, andordering cost is $120. Determine the following:a. The optimal order quantityb. The number of workdays in an order cycle