A company incurs an ordering cost of $40 each time it places an order, regardless of the ordersize. The item's cost is $45, and the annual carrying charge for the item is 10%. If annual demandfor this item is 10,850 and the company's order quantity (Q) is 439, calculate its total annualizedcost of inventory.The total annualized inventory costs are:(Enter your response as a whole number.)

Given: Q = 439 Annual demand (D) = 10850 Ordering or Setup cost (S) = 40 Holding cost (H) = 45*10% =…

Answered: A company incurs an ordering cost of…

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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PART A Speedy Bicycle Company (SBC) is a wholesale distributor of a wide variety of bicycles and bicycle parts. The most popular model is the Dragonfly, which sells for $170. All manufacturing is done at a plant in China, and shipment takes a month (30 days) from the time an order is placed. The estimated order cost is $75, including customs clearance. SBC's cost per bicycle is 65% of retail price, and inventory carrying cost is 11% per year of SBC's cost. If the company cannot fulfill a retail order, the retailer will get the shipment from another distributor and SBC loses that business. SBC is planning inventory for 2023 based on forecasted demand and wants to maintain a 93% service level to minimize lost orders. The company has 300 working days per year. 2021 Forecasted Demand for the Dragonfly Bicycle Model: F A J 15 58 J 8 M 31 M 96 J 59 38 A 23 S 16 0 14 N 26 D 41
Your distribution company has an annual demand of 1,400 lawn mowers. The cost of a lawn mower is $400. Carrying cost is estimated to be 20% of unit cost, and the ordering cost is $25 per order. If you order in quantities of 330 or more, you can get a 5% discount. Do a complete “EOQ with Discount” calculation and determine the optimal order quantity. Please show all calculations.
52 Demand for an item is 3,800 units per year. Each order placed costs $15; the annual cost to carry items in inventory is $10 each. In what quantities should the item be ordered? Note: Round your answer to the nearest whole number.
Demand for your product averages 10,000 units per year. Placing an order costs $500. The holding cost per unit per year is 15% of the cost of the item, and items cost $6.00. What is the EOQ?
a) What is the economic order quantity? b) Find the annual holding costs.c) Find the annual ordering costs.d) What is the reorder point?
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
A company has an average demand of 30 units per day. The supplier's lead time averages 7 days. Assume that the combined standard deviation of demand over the lead time has been calculated and is equal to 20 units. One unit costs $10 and the inventory carrying cost is 25 percent. What is the reorder point for the company if it decides on a 99 percent service level?
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3,400 cases. A case of the soft drink costs R&B $3. Ordering costs are $20 per order and holding costs are 25% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy. (a) economic order quantity (round your answer to the nearest integer.) (b) reorder point (c) cycle time (in days) (round your answer to two decimal places.) days (d) total annual cost (in $) (round your answer to two decimal places.) $
A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days a year that the plant operates. Annual holding cost is $3 per chip, and ordering cost is $120. Determine the following: What is the reorder point, if the lead time is 7 days?
Do you think the safety stock (safety inventory) could be negative? What is the meaning of a negative safety inventory (hint: safety stock is the difference between the optimal inventory and the average demand)?
The Pacific Lumber Company and Mill processes 10,000 logs annually, operating 250 days peryear. Immediately upon receiving an order, the logging company’s supplier begins delivery tothe lumber mill, at a rate of 60 logs per day. The lumber mill has determined that the orderingcost is $1,600 per order and the cost of carrying logs in inventory before they are processed is$15 per log on an annual basis. Determine The total inventory cost associated with the optimal order quantity
A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspaper costs $1.14 per unit and sells for $1.55 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with µ = 150 and σ = 30. (a) What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.) (b) What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.) (c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) What happens to the coffee shop's order quantity as the rebate is reduced? The higher rebate ---Select--- ▾ the quantity that the coffee shop should order.

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