16. A company will begin stocking remote control devices. Expected monthly demand is 800 units. Thecontrollers can be purchased from either supplier A or supplier B. Their price lists are as follows:SUPPLIER AQuantity1-199200-499500 +Unit Price$14.0013.8013.60SUPPLIER BQuantity1-149150-349350 +Unit Price$14.1013.9013.70Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. Which suppliershould be used and what order quantity is optimal if the intent is to minimize total annual costs?

Economic Order Quantity is a technique which helps to identify the optimal ordering quantity based…

Answered: A company will begin stocking remote…

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

K William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D 19,400 units/year Ordering cost S $27/order Holding cost H $5/unit/year a) The EOQ for the workbooks is 458 (round your response to the nearest whole number) b) What are the annual holding costs for the workbooks? $ (round your response to the nearest whole number).
David's Delicatessen flies in Hebrew National salamis regularly to satisfy a growing demand for the salamis in Silicon Valley. The owner, David Gold, estimates that the demand for the salamis is pretty steady at 175 per month. The salamis cost Gold $1.85 each. The fixed cost of calling his brother in New York and having the salamis flown in is $200. It takes three weeks to receive an order. Gold's accountant, Irving Wu, recommendsan annual cost of capital of 22 percent, a cost of shelf space of 3 percent of the value of the item, and a cost of 2 percent of the value for taxes and insurance. How many salamis should Gold have on hand when he phones his brother to send another shipment?
Joe Henry's machine shop uses 2,460 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 2,460 Holding cost per bracket per year $ 1.65 Order cost per order $20.00 Lead time 22 days Working days per year 250 a) What is the EOQ? b) What is the average inventory if the EOQ is used? What would be the annual inventory holding cost? c) Given the EOQ, how many orders would be made each year? What would be the annual order cost? d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? e) What is the time between orders? f) What is the reorder point (ROP)?
A medical equipment has an average monthly demand is 134 units. Its unit cost is $385. It costs $486 to place an order, and the inventory carrying cost is $44 per unit per year. The equipment requires a 95% of service level with a safety stock requirement of 20 units. What is the equipment's minimum annual total inventory cost?
If annual sales in are 65,000 units, price per unit is $25, carrying costs are 30%, and fixed costs per order is $100, then EOQ is 1,316.56. True or False?
Peter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. d) If the weekly demand is 186 and there is a 1.5 week lead time - what is the reorder point (99% service level)? e) If the carrying cost per year is $0.50/unit/year - what is the additional cost associate with the 99% service level compared to 95% service level (i.e. cost of safety stock at 99% level - cost of safety stock at 95% service level)?
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,200 units. Southeastern estimates its annual holding cost for this item to be 323 per unit. The cost to place and process an order from the supplier is $73. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) What is the economic order quantity? units (round your response to the nearest whole number). b) What are the annual holding costs? $ (round your response to the nearest whole number) c) What are the annual ordering costs? S (round your response to the nearest whole number). d) What is the reorder point? units (round your response to the nearest whole number).
Company S offers the following discount schedule for its sheets. Company K orders sheet from Company S. Company K has an ordering cost of $45. The carrying cost is 20%, and the annual demand is 100 sheets. Order Unit Cost 9 sheets or less $18.00 10 to 50 sheets $17.50 More than 50 sheets $17.25 The total cost of ordering more than 50 sheets is
Paulin’s muffler shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information table to determine the optimal inventory target level (or order-up to level). Annual demand 3,910 mufflers ordering cost $75 per order S/D of daily demand 6 mufflers/wk. day service probability 87% Item cost $ 27.00 per muffler lead time 2 wk. Days Annual holding cost 36 % of item value wk. Days 230 per year Review period 18 working days What is the optimal target levels (order up to levels) use excels NORMSINVI() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round value 2 decimal places and final answer to the nearest whole number If the service probability is 90%, the optimal target level will increase, decrease or…
William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: a) The EOQ for the workbooks is (round your response to the nearest whole number). b) What are the annual holding costs for the workbooks? $ (round your response to the nearest whole number). c) What are the annual ordering costs? $ (round your response to the nearest whole number). Demand D Ordering cost S Holding cost H 19,300 units/year $24/order $4/unit/year
Palin’s Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to answer the below questions. Annual demand 3,000 mufflers Standard deviation of daily demand 6 mufflers per working day Item cost $30 per muffler Annual holding cost 25% of item value Review period 15 working days Ordering cost $50 per order Service probability 90% Lead time 2 working days Working days 300 per year What is the optimal target level (order-up-to level)? Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number. If the service probability requirement is 95 percent, the optimal target level will: multiple choice Increase Decrease Stay the same
As the Manager of Branson’s Department Store, you are responsible for ensuring that reorder quantities for the various items have been correctly established. You decide to test one item and choose product Z. A continuous review inventory policy has been used, so you examine this as well as other records and come up with the following data: Cost per unit $35 Holding cost 20 percent of unit cost Average daily demand 10 units Ordering cost $30 per order Standard deviation of daily demand 3 units Delivery lead time 4 days Because customers generally do not wait but go elsewhere, you decide on a service probability of 90 percent. Assume that Branson’s Department Store operates 320 days per year. [What is the annual demand (D)? Determine the optimal order quantity, Q*. Determine the reorder point (R) if demand is constant. Determine the reorder point (R) if demand is varies.

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