A large producer of household products purchases a glyceride used in one of itsdeodorant soaps from outside of the company. It uses the glyceride at a fairly steady rateof 40 pounds per month, and the company uses a 23 percent annual interest rate tocompute holding costs. The chemical can be purchased from two suppliers, A and B. Aoffers the following all-units discount schedule:Order SizePrice per Pound0

Answered: Image /qna-images/answer/fa65b153-986d-4d3a-9b9a-b189af31a839.jpgSupplier B is used. Explanation:

Answered: A large producer of household products…

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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Harvey Gold, orders an unusual olive from the island of Santorini, off the Greek coast. Over the years he has noticed considerable variability in the time it takes to receive orders of these olives. He can place a replenishment order at any time. On average the order lead time is 4 months and the standard deviation is 6 weeks (1.5 months). The monthly demand for olives is normally distributed with a mean of 15 jars and a standard deviation of 6. The fixed ordering cost =$500, the cost of a jar to Harvey is $10 a jar, and the annual inventory holding cost is 18% of the product's cost ($10 per jar). Assume 4 weeks each month and 90% service level. Find the reorder point s, amount of safety stock, order-up-to level S, average inventory level, and the annual inventory-related cost. Table of Z-values for normal distribution: Service level Z-value 90% 1.29 91% 92% 93% 94% | 95% 96% 97% 98% 99% 1.65 1.34 1.41 1.48 1.56 1.75 1.88 2.05 2.33
Determine which delivery alternative would be most economical for 70 boxes of parts. Each box costs $346 and the annual holding cost is 30% of the cost. Assume 365 days per year. Overnight delivery option costs $300, and eight-day delivery option costs $125 a. The overnight option is at least $70 cheaper than eight-day b. The eight-day option is at least $35 cheaper than overnight c. The eight-day option is at least $70 cheaper than overnight d. The overnight option is at least $35 cheaper than eight-day
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,900 units. Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $78. 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).
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 14,100 units. Southeastern estimates its annual holding cost for this item to be $22 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 3 working days. a) What is the economic order quantity? 306 units (round your response to the nearest whole number). b) What are the annual holding costs? $ 3365 (round your response to the nearest whole number). c) What are the annual ordering costs? $ 3364 (round your response to the nearest whole number). d) What is the reorder point? units (round your response to the nearest whole number).
A computer products store stocks color graphics monitors, and the daily demand is normally distributed with a mean of 1.6 monitors and a standard deviation of 0.4 monitor. The lead time to receive an order form the manufacturer is 15 days. Q 17.1- Determine the reorder point that will achieve 98 % service level.
Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 8,888 units per year. JTP purchases these tires from a supplier. The ordering cost is $124 per order and the holding cost is $19 per tire per year. The supplier always deliver the shipment within 6 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the optimal annual inventory cost for JTP? Use at least 4 decimal places.
A company has a demand for 25,750 units annually. The holding cost is 33% of the item cost which is $10.00. The ordering or set-up cost is $250.00 per order and the lead time is 5 days. Assume that there are 350 days per year Suppose a price break of $50 per order is offered for purchase quantities of 2,000 or greater. Question: What is the reorder point for this inventory strategy? What is the inventory position immediately after an order is placed for the inventory strategy that you have selected?
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).
You are in the process of deciding the optimal order quantity of shampoo packs for a hotel. The supplier charges you $47 per order and your stockroom costs approximately $0.69 per shampoo pack per year to store the product. Based on prior research, you were able to determine that the hotel goes through approximately 94 shampoo packs per day. They hold 0 safety stock. The supplier is willing to give the following quantity discounts for the product. Using the order quantity that will minimize total cost, what is the total annual cost? Quantity 1 - 1499 $2.25 $2.10 $2.05 $2.03 Note: Round your answer to 2 decimal places. Do NOT include $ sign or a comma. For example, answer like 50246 and NOT $50,246 Answer: 1500 - 3999 4000 - 7999 8000+ Price Check
You have been asked by your boss to calculate the Economic Order Quantity (EOQ) for one of the major sub-components used by your firm. You have been provided the following data: The weekly demand for this part is 125 units. The cost of the sub-component is $300. The annual holding cost is 0.5% and the ordering or setup cost is $50.
20
Amy drinks 5 capsules of coffee every week (assuming 50 weeks in a year). Each capsule costs $1, and the delivery fee is $5 per order. The annual holding cost rate is 20%. The coffee manufacturer provides a special offer: the price of each capsule becomes $0.98 if the order quantity is at least 80 capsules. Amy, therefore, conducts the following analysis: STEP 1: The EOQ without the discount is around 112 units, and the corresponding minimum ordering + holding cost is $22.36. STEP 2: The ordering + holding cost with the quantity discount is K*R/80 + h_new*80/2 = $23.47. STEP 3: The additional ordering + holding cost to get the discount offer is $23.47 - $22.36 = $1.11. STEP 4: The additional saving in the purchasing cost is R*($1 - $0.98) = $5. According to Amy's analysis, she decides the quantity = 80 to obtain the discount, but the decision is not optimal. Please choose the earliest step that Amy makes a mistake. a Step 1 b Step 2 c Step 3 d Step 4

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