2. (SCM) Paris bakery requires, on average, 1,800 tons of flour each week, with a standarddeviation of 500 tons. The lead time to receive its orders is 3 weeks. The holding cost forone ton of flour for one week is $8. It operates with a 97.98% in-stock probability. Whatwould be its average holding cost per ton? (

Given data: Standard Deviation = 500 tonsLead time = 3 weeks Annual requirement = 1800 tonsHolding…

Answered: 2. (SCM) Paris bakery requires, on…

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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Similar questions

Sumco's annual demand is expected to increase from 1,000 units to 1,500 units, the ordering cost is reduced to $8 per order and the average carrying cost per unit per year is increased to $0.80. Under these new conditions: A) Calculate the new EOQ. B) Calculate the Annual Ordering Cost, the Annual Holding Cost and the Total Annual Cost. C) Plot a graph showing Ordering Cost, Holding Cost and Total Cost as a function of Q for this problem Predictions: On acer
Current decision to buy: Ross White's machine shop uses 300 brackets each month during the course of a year. This usage is relatively constant throughout the year. Currently, these brackets are purchased from a supplier 100 miles away for $25 each and the lead time is 2 days. The holding cost per bracket per year is $3.75 (15% of the unit cost) and the annual ordering cost per order is $18.50. There are 240 working days per year. Possible future decision to make in-house: Ross White is reconsidering his decision of buying the brackets and is considering making the brackets in-house. He has determined the set up costs would be $22.50 in machinist time and lost production time. Forty eight brackets could be produced in a day once the machine has been set up. Ross estimates that the cost (including labor and materials) of producing one bracket would be $22.85. The holding cost would be 12% of the cost. What is the EOQ given Ross' current decision to buy the brackets? What is the…
A company that markets hypodermic needles to hospitals. The company purchases the needles from a supplier. The annual demand is 6,603 needles. The annual setup (or ordering) cost is $31 per order and the inventory holding cost per unit per year is $11.35. The company operates 293 days a year. Calculate the optimal annual holding cost for the company.Use at least 4 decimal places.
All Seasons Flower Shop uses 870 clay pots a month. The pots are purchased at $ 6 each. Annual holding cost per pot is estimated to be 35% of purchase cost. Ordering cost is $ 40 per order. The shop operates 12 months in a year. What would be the difference in total cost if an order quantity of 1000 is used instead of the EOQ. Note: calculate the difference as “total cost with Q = 1000 – total cost with EOQ”.
A national chain of tyre fitters (tiger wheel and tyres) stocks a popular tyre for which the following information is available. The company operates on 50-weeks a year and normally operates from Monday to Friday only. Ordering Costs per order N$175.50 Holding Cost per unit 3 % of unit cost Cost per tyre N$1 800 Reorder quantity 5 000 Lead time 12 to 16 days Maximum usage 175 tyres per day Minimum usage 90 tyres per day Average usage 140 tyres per day 1. Calculate the minimum level of inventory 2. Calculate the maximum level of inventory
please answer both parts of the question within 30 minutes.
Joe Henry's machine shop uses 2,530 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,530 Holding cost per bracket per year $1.65 Order cost per order $18.25 Lead time 2 days Working days per year 250 Part 2 a) What is the EOQ? enter your response here units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? enter your response here units (round your response to two decimal places). What would be the annual inventory holding cost? $enter your response here (round your response to two decimal places). Part 4 c) Given the EOQ, how many orders will be made annually? enter your response here orders (round your response to two decimal places). What would be the annual order cost? $enter your response here (round…
Are inventory cost flow methods used the same for periodic and perpetual inventory systems? Explain.
1. A local producer of vegetables is deciding how much inventory to have to meet the next week's demand. Vegetable products are perishable with a shelf-life of a week. Based on the historical observations, the company expects the weekly demand to follow a normal distribution with mean 4500 pounds and standard deviation of 400 pounds. The price of the product is $14 per pound in the store, and it costs $6 to produce. If there are any leftovers, the company is required to dispose them safely to avoid any pollution. This process costs $0.5 per pound. Answer the following questions. a) What is the cost of overage per pound? b) What is the cost of underage per pound? c) What is the optimal order quantity?
I need question D solved please (a) What was their average aggregate inventory value? =46,410,239(b) What was their average inventory (measured in weeks of supply)? =6.97(c) What was their inventory turnover?=7.1771BIT operates on a build-to-stock policy, and therefore stores its finishedgoods in a warehouse capable of housing up to 70,000 units. Its annual overhead cost (fixed cost) is $117,000; and it costs $3/unit to house the finished goods. BIT has been approached by a warehouse company offering to house the finished goods for a unit cost of $4.5/unit, with an annual contract cost of $30,000. (d) Should BIT continue operating its own warehouse, or should it employthe warehouse company? Why?
K Consider a firm with an annual demand of 6000 units, a setup cost of $20 per order, and an annual holding cost per unit of $2. If the company purchases 1200 units every time that they order, what are the annual setup and holding costs? A. $1,300 B. $346 O C. $2,400 OD. $200 OE. $132,000 OF. $693 TER
Prob 4: Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside's generator production operation will require 2000 components per month throughout the year (24,000 units annually). Assume that the ordering costs are $20 per order, the unit cost is $2.50 per component, and annual holding costs are 25% of the value of the inventory. Westside has 250 working days per year and a lead time of 4 days. Current production line has an annual capacity of 30,000 units. Answer the following inventory policy questions: a. Rewrite the inputs using standard notations (D, Co, Ch, ... ) b. What is the reorder point? c. What is the cycle time? d. What are the optimal order quantity and the total annual cost? e. Calculate the optimal production lot size.

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