A manufacturer has a production facility that requires 15,604 units of component JY21 per year.Following a long-term contract, the manufacturer purchases component JY21 from a supplier with alead time of 7 days. The unit purchase cost is $25.6 per unit. The cost to place and process an orderfrom the supplier is $121 per order. The unit inventory carrying cost per year is 10.5 percent of theunit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. Ifthe manufacturer uses a constant order quantity of 2,640 units per order, what is the annual holdingcost?Use at least 4 decimal places.

Holding cost is the total cost incurred to store and hold the stock of inventory in an organization.…

Answered: A manufacturer has a production…

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...

See similar textbooks

Similar questions

Which of the following z-scores will you use to be able to meet demand from inventory 90% of the time? 0 1.96 1.65 1.28 3.00 O 2.33 10 Which of the following z-scores will you use to meet demand from inventory 95% of the time. O 2.33 1.65 3.00 O1.28 O1.96
A company replaces its SKU’s at a rate of 25 pcs a day. In the past this qty tended to vary normally & have a std dev of 3 units per day. SKU’s are ordered from XYZ Supplier. LT is normally distributed with an average of 10 days & std dev of 2 days. What ROP should be used to achieve a service level of 95%.
Life Cycle Costing is a term that is: Group of answer choices typically used in the construction industry Used when making decisions between alternatives not used within the government A and B Employed principally by the government
A retailer currently places orders with its suppliers on a weekly basis. It is considering a switch to a routine in which it places orders on a daily basis. No change is expectedin the retailer’s demand. This change will have what effect on the volatility of its orders?a. It will decrease because its orders will better match its demand.b. It will stay the same because the retailer’s demand remains the same.c. It will increase because the more frequent orders will lead to more fickle decisions
The definition of work-in-process (WIP) inventory is: Select one: a. An end item ready to be sold, but still an asset on the company's books. b. Products or components that are no longer raw materials but have not yet become finished products. c. Materials for maintenance, repair and operation. d. Materials that are normally purchased but have not yet entered the manufacturing process. and. Additional stock to allow for uneven demand; a buffer.
A plastic canister manufacturing company maintains an annual safety stock of 500 units of plastic caps. If the company places an annual purchase order for 1,800 units of these caps, its average annual inventory, in units, is between: ( )1,500 and 1,300 ( )3,200 and 3,000 ( )2,400 and 2,200 ( )1,200 and 1,000 ( )1,900 and 1,700
Consider the requirement that shopping malls need a license to remain open 24 hours, where these licenses are in fixed supply. These licenses are however freely tradable among actual and potential owners, and the industry is perfectly competitive. If the average 24-hour shopping mall’s annual revenue is $250,000, while the licenses may be leased at an annual fee of $100,000. Given this information, average variable cost for the industry would be $100,000. Is the preceding statement true or false?
Emarpy Appliance is a company which produces all kinds of major. Bud Banis, the president of Emarpy, is concerned about the production policy for the company’s bestselling refrigerator. The annual demand for this has been about 8,000 units each year, and this demand has been constant throughout the year. The production capacity is 200 units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $50 per year. The current production plan calls for 400 refrigerators to be produced in each production run. Assume there are 250 working days per year. (b) If the company were to continue to produce 400 units each time production starts, how many days would production continue? (c) Under the current policy, how many production runs per year would be required? What would the annual set-up cost be? (d) If the current policy continues, how many refrigerators would be…
The Northridge Company tends to keep the inventory low. At the same time, it is important to respond to demand quickly, since a customer who wants a product K is very likely to get one from a competitor if Northridge Company doesn’t have one available immediately. Northridge Company’s current policy to produce the product K is to produce 100 per week, which is the average demand. Even this is a problem, as the production manager has pointed out, since the equipment is also used for other products and the lot size of 300 would be much more efficient. He said he is currently set up the production for product K for the next week and states that he has capacity available to produce 300 at a time next week. The following lists the forecasts and actual customer orders for the next 12 weeks. Week 1 2 3 4 5 6 7 8 9 10 11 12 Forecast 90 120 110 80 85 95 100 110 90 90 100 110 Customer Orders 105 97 93 72 98 72 53 21…
Q24
The maintenance expense on a piece of machinery is estimated as follows. Maintenance for the 1st year is P150 and increase by P150 every year until the fourth year. If interest is 8%, find the equivalent uniform annual maintenance cost.
RoyalTech's South Jersey warehouse faces a daily demand that is normally distributed, with mean 1,000 and standard deviation 100 pallets. RoyalTech's supplier has a lead-time that is normally distributed, with mean 5 days and standard deviation 1 day. RoyalTech reviews its inventory periodically, that is, every 7 days. (Hint: think about the inventory model appropriate here) RoyalTech's warehouse runs 365 days a year, and the cost of carrying inventory is 18.25% per year. The supplier charges RoyalTech $2,000 per pallet, and $5,000 per delivery. RoyalTech plans to maintain 98% SL. NORMSINV(0.98) = 2.054. L(2.054) = 0.0073. Answer the following questions. 1. How much safety stock should Royal Tech carry? [Select] v pallets. 2. What is RoyalTech's average inventory? [ Select ] pallets. 3. What is the total relevant cost incurred by RoyalTech per day? $ [ Select] 4. What is the Fill Rate that RoyalTech is able to achieve for this service level? [ Select ]

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS