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?
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?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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hello please answer number 3 only thanks
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40aa2789-aa91-472c-9057-4707469a4ddf%2F194ce4f9-0640-43a9-9058-3d151daa5444%2Fsesslbl_processed.jpeg&w=3840&q=75)
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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