4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per yearand ordering costs are $96. The following price schedule is offered. Determine the EOQand the # of orders per year.# BoxesUnit Price1000-1999$1.252000-4999$1.205000-9999$1.1510000+$1.10a. What is the order quantity following the EOQ model?b. Considering the quantity discount, would the economic order quantity be changed?c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?

An economic order quantity is a type of production planning used to minimize the total cost of…

Answered: a. What is the order quantity following…

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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The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.
Mac-in-the-Box, Inc., sells computer equipment by mail andtelephone order. Mac sells 1,200 flat-bed scanners per year.Ordering cost is $300, and annual holding cost is 16 percentof the item’s price. The scanner manufacturer offers thefollowing price structure to Mac-in-the-Box: What order quantity minimizes total annual costs?
Discuss considerations that should be fully taken into account when developing inventory related relevant costs for use in an economic order quantity (EOQ) model. Why do conflicts arise between the EOQ model's optimal order quantity and the order quantity that managers regard as optimal?
3 Which of the following inventory models considers backorder costs? O a. Economic Order Quantity with Quantity Discounts O b. Basic Economic Order Quantity C. Economic Order Quantity with Planned Shortages Od. Economic Production Quantity
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?
1.) THI produces a GPS device that is becoming popular in parts of Scandinavia. When Thaarugo produces one of these, a printed circuit board (PCB) is used and it is populated with several electronic components. Thaarugo determines that it needs about 16,500 of this type of PCB each year. Demand is relatively constant throughout the year and the ordering cost is about $20/ order; the holding cost is 25% of the price of each PCB. Two companies are competing to become the dominant supplier of PCB, and both have offered quantity discounts as shown in the following table. paper). If you work with someone just turn in 1 paper with everyone's name. REMEMBER TO EXPLICITLY WRITE THE FORMULAS USED AND THE VALUE FOR EACH VARIABLE. Which of the two suppliers should be selected if Thaarugo wishes to minimize total annual inventory costs? Explain. Supplier A- Quantity 1-199 200-499 500 or more Supplier A Price $38.60 $35.75 $34.80 un names on a Supplier B- Quantity 1-299 300-999 1000 or more…
Best Buy's monthly demand for an Olympus Digital Camera FX 5500 is Poisson distributed with a mean of 3 cameras/month. The order quantity is 6 cameras, holding costs are $6.00 per camera per year, the backorder cost per outage is $12.00/unit, and the lead-time is 1 month. Determine the safety stock. 00 01 02 03 O4
AaBbCc AaBbCc AaBbCc No Spacing Normal Reuse Heading 1 Replace Files Paragraph Styles Editing Reuse Files Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation of 12. If Hinsdale cannot have stockouts in more than 10% of the time in any order, how much safety stock should be maintained and at what reorder point? 1. SKU F5402: daily demand is normally distributed with a mean of 16, standard deviation of 4, lead time is 4 days, and must operate at a 95% service level. 2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally with a mean of 6 days and standard deviation of 2 days, and must operate at a 95% service level. 3. SKU F9004: daily demand is normally distributed with a mean of 21 units and a standard deviation of 3 days. The lead time is also normally distributed with a mean of 4 days, standard deviation of 2 days, and a service level of 90% is required. dictions: On acer %24 4. % &…

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a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?