04/30122Problem #1 - Jasper Inc., a company that sells air conditioning units for cars intends to reduce its total annual inventorycost. The annual demand is expected to be 6,000 units if market conditions are unfavorable, and 9,000 units if marketconditions are favorable. The Purchasing & Warehousing Manager estimates that the ordering cost is $20.00 per orderand the holding cost is $2.00 per unit per year.a.Calculate the Economic Order Quantity (EOQ), Annual Ordering Cost, Annual Holding Cost and TotalAnnual Inventory Cost under unfavorable and favorable market conditions.b.The Purchasing & Warehousing Manager identified two improvement projects in conjunction with hteam:Project A: Reduction of ordering cost to $18.00.Project B: Reduction of holding cost to $1.40 per unit per year.Which project would result in greater reduction of the EOQ and Total Annual Inventory Cost?Which of the projects would you recommend and why? Show all your calculations.

Economic order quantity is the optimal order quantity that a company needs to purchase so that its…

Answered: and the holding cost is $2.00 perunit…

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 following lots of a particular commodity were available for sale during the year Beginning inventory 9 units at $47 First purchase 15 units at $50 Second purchase 20 units at $21 Third purchase 18 units at $58 The firm uses the periodic system, and there are 27 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method? Do not round intermediate calculations. a.$1,269 b.$1,233 c.$1,323 d.$1,148
GIVE THE RECOMMENDATION AND CONCLUSION Office Depot has almost 1,000 office superstores and giant catalog of office supplies that it offers via mail order. Yet office Depot also enables its customers to shop on the internet. Its Web site offer virtually all the products Office Depot carries in its stores and catalogs and guarantees next-day delivery to most locations with no delivery charge on orders over 5K. online order tracking is available, and customized ordering, which takes into account the historical patterns of individual customers product purchases, is also a feature of Office Depot internet-based channel.
4. Oxford Breeze School is gearing up to start their new session. Just like other grammar schools, they too provide goodie bags to their students. To source the bags, they have asked for quotations from their long-term supplier. The supplier's quote has given below: No. of Goodies Price 800 $8 801- 1200 $7 1200+ $6 The school operates 250 days per year. Daily usage rate is 35 goodies and ordering costs are $50. Carrying costs is $2. a) Determine an order quantity that will minimize the Total Cost. b) Figure out the Number of orders. c) If lead time is 10 days, at what point should the company re-order?
f2 Same problem statement: Weekly demand for DVD-Rs at a retailer is normally distributed with a mean of 1,000 boxes and a standard deviation of 150. Currently, the store places orders to the supplier, with a reorder point of 4,200 boxes. The order quantity to the supplier is fixed at 5,000 boxes. Replenishment lead time is 4 weeks, fixed order cost per order is $100, each box costs the retailer $10, and the inventory holding cost is 25% per year. Assume 50 weeks in a year. Given the problem parameters, what is the optimal order quantity the retailer should order? Numeric Response f3 2040 f4 f5 40 f6 0 4- f7 ♫+ f11 W f12. X insert prt sc + = O delete ← backspace home num lock
Robin Is trying to figure out how much extra inventory of boxes of imported chocolate to keep. During the past year, the demand per week was variable with a mean of 85 and a σR 12. Lead time was also variable with a mean of 6 weeks and o₁= 2. Riley would like to maintain a 90% service level. What is the recommended safety stock? What is the ROP?
Exercise 4 Gentle Ben's Bar and Restaurant uses 5.000 quart bottles of an imported wine each year. me effervescent wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20% of the purchase price. It takes three weeks for an order to arrive, Weekly demand is 100 bottles (closed two weeks per year) with a standard deviation of 30 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95% service level. a) What is the economic quantity for Ben to order? b) At what inventory level should he place an order?
1. What is the economic order quantity for BBE in units? In pounds? 4.What is the total cost for using air carrier transportation?
Suppose that we would like to determine Reorder Point for the product. From the historical data the manager determined demand during lead-time for that product fits Normal distribution with a mean of 200 and standard deviation of 10 products. The maximum stock out risk is 10%. Answer the following questions according to the (Q, R) system. a) Find the safety stock if the lead time is 2 weeks. b) Find the reorder point. c) Find the reorder point if the stock out risk decreases to 1%. Comment on the result.
***** The company Marombeiro is a commercial representative of a food supplement widely consumed in gyms. The average daily demand for the product is 1,500 units and a standard deviation of 300 units. Average shipping time is 5 days. Of course, if the order is placed at the end of the week, it may take a little longer to receive the shipment, so the standard deviation of the delivery time is 2 days. The unit has a value of R$ 50.00 per unit in stock, an order cost of R$ 50.00 and an annual maintenance fee of 20%. Suppose Company Marombeiro wants to change the service to 99%. How many days of safety stock the company will have. ( )5.12 days ( )5.67 days ( )5.33 days ( )4.77 days
Please do not give solution in image format thanku The purchasing department can reduce order quantity and work wtih suppliers to deliver purchases items more frequently. This should lower total inventory. Make option Buy option fixed cost $125,000 Fixed Cost $5,000 Variable Cost $15 Variable Cost $17 Find the break-even quantity and the total cost at the break-even point.

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