5. Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer locatednear Cincinnati, Ohio. She knows that annual demand will be 30,000 units per year and that the carrying cost will be$1.50 per unit per year. The ordering cost, on the other hand, can vary from $45 per order to $50 per order. During thepast 450 working days, Morgan has observed the following frequency distribution for the ordering cost:ORDERING COSTFREQUENCY$4585$4695$4790$4880$49$505545Morgan's boss would like Morgan to determine an EOQ value for each possible ordering cost and to determine an EOQ valuefor the expected ordering cost."

ECQ for Expected Ordering Cost =1373.03

Answered: 5. Morgan Arthur has spent the past few…

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...

See similar textbooks

Similar questions

AV City (Problem 13-1) assumed with certainty that the or-dering cost is $625/order and the inventory carrying cost is $130/unit/year. However, the inventory model parametersare frequently only estimates that are subject to somedegree of uncertainty. Consider four cases of variation inthe model parameters as follows: (a) Both ordering costand carrying cost are 10% less than originally estimated;(b) both ordering cost and carrying cost are 10% higherthan originally estimated; (c) ordering cost is 10% higherand carrying cost is 10% lower than originally estimated;and (d) ordering cost is 10% lower and carrying cost is 10% higher than originally estimated. Determine the opti-mal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four casesand compare the sensitivity of the model solution tochanges in parameter values.
Inventory manager of a retail store wants to order plastic Easter eggs, demand for which is highly seasonal. Easter eggs come in a special value box (250 eggs per box). The manufacturer is located in China, so a long lead time required to receive the orders. After the order is placed, eggs will arrive just in time before the Easter Holiday. Therefore, if stocks out, the inventory manager will not be able to place a second order. The demand follows a normal distribution with a mean of 4,000 boxes and a standard deviation of 500 boxes. Each ordered special value box will cost $3 and will retail at $7. Leftover eggs will be salvaged at $2 per box after the Easter Holiday. Customer goodwill cost is estimated to be $0.934 for each lost sale. Find optimal order quantity and Expected Sold (Assume f_u(z)=0.25). Group of answer choices Cannot be calculated using the information given Q*=4,480 boxes, E[Sold]=4,000 boxes Q*=3,956 boxes, E[Sold]=4,480 boxes Q*=4,480 boxes, E[Sold]=3,956…
Jill's Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows: a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point? b. Find the total inventory costs if using inventory policy. This is a case considering safety stock (make sure to use the right formulas) Holding cost per unit per year is given as a percentage of item cost ITEM TEGDIW WIDGET Annual Demand 10,000 5,000 Holding cost (% of item cost) 20% 20% Set up or order cost $150.00 $25.00 Lead Time 4 weeks 1 week Safety stock 55 units 5 units Item cost $10.00 $2.00
A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which have the following characteristics: > Demand (D) = 2,000 units/year > Demand is normally distributed > Standard deviation of weekly demand = 2 units > Ordering cost = $30/order > Annual holding cost (H) = $5.00/unit > Desired cycle-service level = 85% > Lead time (L) = 4 weeks Refer to the standard normal table for z-values. a. If the company uses a periodic review system, P should be 3.87 weeks. (Enter your response rounded to the nearest whole number.) T should be units. (Enter your response rounded to the nearest whole number.)
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,950 units per year. The cost of each unit is $99, and the inventory carrying cost is $8 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 119 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ?units (round your response to two decimal places).
NING SYSTEM (ACADEMIC) tory Management - Spring21 Time left 1:14:19 Alocal Omani retail store finds out the its competition is ordering 50O kgs each order of a coffee brand. Over years the local Omani store has realized that its competition has adopted an economic ordering quantity (EOQ) policy for ordering. Whereas, local Omani store has determined that it take OMR 25 to order and the annual holding cost is 25% of the price of the coffee brand. The price of the coffee brand is OMR 100 per kg. What is the annual demand for this coffee brand? Round up to the nearest integer None is correct Ob. 100,000 150,000 O d. 90,000 125.000 NEXT PAGE US PAGE
ABC Company placed an order on December 1. It normally receives the order after 9 days. If the company has a normal usage of 10 units per day. What is the re-order point?
Please do not give solution in image formate thanku Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $98, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units. (This is a corporate operation, and there are 250 working days per year). A) What is the EOQ?B) What is the average inventory if the EOQ is used?C) What is the optimal number of orders per year?D) What is the optimal number of days in between any two orders?E) What is the annual cost of ordering and holding inventory?F) What is the total annual inventory cost, including cost of the 6,100 units?
A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug. Demand (D) 85 tablets/week Working weeks per year 52 weeks Unit holding cost per year (H) $6 Order cost (S) $44/order Standard deviation of weekly demand (sd) 15 tablets Lead time (L) 2 weeks Desired cycle service level 95% If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point? If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
The seasonal demand for a particular product is given below: Period 12 3 4 56 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $1.3 Calculate total ordering cost using the following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantity
The distribution manager for Putnam Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale value $100 Annual demand 50,000 units Std. Deviation of Demand 30 units per day Working year 250 days Production lead time 9 days Ordering cost for production $1,800 Holding cost per unit per year 20% of value Desired service level 96 percent: If Putnam wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
define the ABC approach to inventory management Several metrics can be used to identify an A-status:explain?

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS