A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.30 per stone for quantities of600 stones or more, $8.70 per stone for orders of 400 to 599 stones, and $9.20 per stone for lesser quantities. The jewelry firmoperates 112 days per year. Usage rate is 19 stones per day, and ordering costs are $50.a. If carrying costs are $1 per year for each stone, find the order quantity that will minimize total annual cost. (Do not roundintermediate calculations. Round your final answer to the nearest whole number.)Order quantitystonesb. If annual carrying costs are 32 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations. Roundyour final answer to the nearest whole number.)Optimal order sizestones c. If lead time is 2 working days, at what point should the company reorder? (Do not round intermediate calculations. Round yourfinal answer to the nearest whole number.)Reorder quantitystones

Optimal order quantity is the order quantity that the company should purchase or buy to reduce its…

Answered: A jewelry firm buys semiprecious stones…

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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A company has been approached by their supplier who would be willing to offer a discount of 5% on orders over 500 units. Information regarding current inventory costs is as follows: Holding cost per unit per annum 10% of purchase price Ordering costs = $2 per order Annual demand = 15,000 units Purchase price 200 units Identify which option is better for the company. $15 per unit Current EOQ quantity = = =
List the major assumptions of the EOQ model
A local distributor for a national tire company expects to sell approximately 200 steel-belted radial tires of a certain size and tread design next year. Annual carrying cost is $20 per tire, and ordering cost is $5. The distributor operates 200 days a year. What is the Total Cost?
Fresco Inc. manufactures sour pops annually which requires 0.4 kilograms of raw material. The company produces and sells 1,600, 000 sour pops annually. The cost to place a single order is $60 per hour which takes four (4) hours on average. The annual carrying cost of inventory is 4% per annum and currently, the company orders twenty (20) times per year. A major supplier has offered some incentives for bulk purchases and as the junior cost accountant you were asked to provide your professional opinion on the optimal order size. A 3% discount would be given if the entity doubles its current lot size. A further 2% would be given if the entity increased its order by two and a half times the current lot size. The material is currently bought from its supplier for $120 per kilogram. Required: (a) Calculate the Economic Order Quantity (EOQ). (b) Calculate the total cost based on the EOQ. (c) Calculate the total cost for each alternate order quantities, including the current policy. (d) What…
Describe what is ABC classifications in inventory management?
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $9.70 per stone for lesser quantities. The jewelry firm operates 230 days per year. Usage rate is 16 stones per day, and ordering costs are $45.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do…
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 160 cartons per week for which Haley pays $5 per carton. Inbound shipments from the vendor average 750 cartons with an average lead time of 3 weeks. Haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 500 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value? The changes decrease Haley's average aggregate inventory level by The changes decrease Haley's average aggregate inventory value by $ cartons. (Enter your response as a whole number.) (Enter your response as a whole number.)
Regional Supermarket is open 360 days per year. Daily use of cash register tape averages 10 rolls. Usage appears normally distributed with a standard deviation of 2 rolls per day. The cost of order-ing tape is $1, and carrying costs are 40 cents per roll a year. Lead time is three days. a. What is the EOQ?b. What ROP will provide a lead time service level of 96 percent?
7. Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. ≻Demand = 95 bags/week ≻Order cost = $57/order ≻Annual holding cost = 30 percent of cost ≻Desired cycle-service level=98 percent ≻Lead time = 1 week(s) (5 working days) ≻Standard deviation of weekly demand = 20 bags ≻Current on-hand inventory is 350 bags, with no open orders or backorders. a. What is the EOQ? (Enter your response rounded to the nearest whole number.) and (Enter your response rounded to one decimal place.) b. What should R be? (Enter your response rounded to the nearest whole number.) c. An inventory withdrawal of 10 bags was just made. Is it time to reorder? (is or is not)
6. Wang Distributors has an annual demand for an airport metal detector of 1,000 units. The cost of a typical detector to Wang is $50. Carrying cost is estimated to be 25% of the unit cost, and the ordering cost is $40 per order. If Ping Wang, the owner, orders in quantities of 200 or more, he can get a 3% discount on the cost of the detectors. Should Wang take the quantity discount?
SKU One is sold at retail store for $8 per unit. SKU One has a weekly demand of 975 units with an average lead time of 5 weeks and a standard deviation of lead time of 2 weeks. Based on the information and a 95% service level, what is the reorder point for SKU One? please show work how to solve
please answer within 30 mins.

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