A company purchases wood for use in its products. The firm uses 760 pounds of wood per week andpurchases wood for $1.75 per pound from a supplier. Each time the firm orders wood from the supplier,the firm must pay a $75 order processing charge. The firm's annual holding cost percentage is 31%.Do not round intermediate calculations. Assume there are 52 weeks in a year and roundyour answer to two decimal places.If the company orders 3,000 pounds of wood with each order, what is the sum of theannual holding and ordering costs?dollars

Eoq is the economic or optimal order quantity that company should purchase to minimise its total…

Answered: A company purchases wood for use in its…

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

Which of the following statements is true: (T, S) policies require more safety stock than (s, Q) policies to achieve the same CSL. An (s, Q) policy where both demand and lead-time are stochastic requires more safety stock than an (s, Q) policy where only the demand is stochastic. For an (s, Q) policy, the reorder level is always larger than the safety stock. All of the above.
It costs you $500 every time you place an order for a particular product. It costs you $3 per unit to keep this product in stock. Annual sales are 1,552. Calculate the Economic Order Quantity to the nearest integer.
Henderson Furniture sells reproductions of 18th-century furniture. For a particular table, the assumptions of the inventory model with backorders are valid. Annual Demand: D = 200 tables per year Inventory holding cost (as a percent of the item cost): 1 = 25% per year Item cost: C = $800 per table Ordering cost: Co = $80 per order Backordering cost: Cb = $50 per table per year The store is open 250 days a year. What is the economic order quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number. ○ A. 28 B. 5 ○ C. 13 OD. 23 E. 14 QUESTION 4 What is the backorder quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number. ○ A. 14 B. 23 C. 13 OD. 28 ○ E. 5
Inventory can be very expensive for firms to hold and manage. One measure of how effective a firm is at managing their inventory is the inventory sales ratio (inventory/sales). Assume a firm has quarterly sales of 1 million and inventory is normally distributed with a mean of $500k and a standard deviation of $100k. simulate the expected inventory to sales ratio for 10,000 iterations. What is the expected mean inventory to sales ratio? What is the probability that the inventory sales ratio is less than 0.5?
A popular, local coffeeshop in one of the suburbs of New York City (NYC) estimates they use 3,000 pounds of coffee annually. They have to determine how many pounds to order each time in order to minimize their total annual cost. a. Determine the optimal size of the order assuming an EOQ model with a holding cost of $10 per pound annually and an ordering cost of $100. (Do not round intermediate calculations. Round your answer to 2 decimal places.) ✓ Answer is complete and correct. Optimal Q 244.95 b. The owner has recently opened another store of the same size in New York City; however, the demand for coffee is increased to 3,800 pounds annually, and the holding cost is $60 per pound. Those numbers are much higher as is the cost of real estate in NYC. The owner places orders of the same size as the first store because they are the same size stores. How much will the total cost be in the new coffeeshop? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A company that markets hypodermic needles to hospitals. The company purchases the needles from a supplier. The annual demand is 7,641 needles. The annual setup (or ordering) cost is $20 per order and the inventory holding cost per unit per year is $6.05. The company operates 258 days a year. Calculate the optimal number of orders per year for the company.
1.) A firm orders on average 400 wheels each month. Demand is normally distributed with standard deviation of the monthly demand being 20 wheels. The ordering cost is $8 per order. The cost to buy one wheel is $4 per wheel. Annual carrying costs are 50% of unit cost. The supplier lead time is 2 operating days. The firm operates 240 days per year, in other word, the firm operates 20 days each month. Each order is received from the supplier in a single delivery. There are no quantity discounts. Write your answer and then Round your answer up to the nearest number for future calculation. (e.g 9.6 => 10). Please clearly write down the formulation and calculation for your answers. Note: Here I make the time measures bolded for you to make you pay the attention to their differences. Please notice the difference in times measure units, so that you do not make mistake by doing calculations with different time measures. You need to convert the data to the same time measures before doing any…
A company is planning for its financing needs and uses the basic fixed-order quantity inventory model. Which of the following is the total cost (TC) of the inventory given an annual demand of 10,000, setup cost of $32, a holding cost per unit per year of $4, an EOQ of 400 units, and a cost per unit of inventory of $150?
Every year XYZ Corp. sells 3,300 units of its product. It is charged $56.50 every time it reorders from its supplier and its inventory holding costs are $6.20 per unit. In order to minimize overall inventory costs, what would be the firm's average number of units that it holds?
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.
An online retailer sells 1,500 t-shirts per year. The cost of the t-shirts to the store is $3.00 and the cost of placing an order is $15 per order. It cost $0.60 per t-shirt per year for the retailer to hold the t-shirts. The retailer sells the t-shirts for $9.99. Determine (a) the optimal order quantity, (b) the order frequency (c) the annual holding and setup cost.
I run a Ford car dealership, and I experience known and constant demand for cars. I sell 10,000 cars annually. The cost of ordering is $819, and the annual cost of holding a car on the lot is $500. What is the economic ordering quantity (EOQ)? Round to the nearest whole number (so if your answer is 443.363, round to 443)

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