Bold Vision, Inc. must purchase toner from a local supplier. The demand rate is 620 EP cartridges per week. The production rate is 1,735 EP cartridges per week,and the setup cost is $100. The value of inventory is $150 per unit, and the holding cost is 15 percent of the inventory value. The company does not wish to carryraw material inventory and therefore only purchases enough toner to satisfy the demand of each individual batch of cartridges. Each toner cartridge requires onepound of toner. The raw material supplier offers Bold Vision a purchase discount of $4.00 per pound if the company orders at least 5,000 pounds at a time. BoldVision operates 52 weeks per year. Should Bold Vision accept this offer and alter its toner purchase quantity?Bold VisionV accept this offer and thereby save $per year. (Enter your response rounded to the nearest whole number.)shouldshould not

Weekly Demand = d = 620 units Weekly Production = p = 1735 units Set-up cost = S = $100 Cost per…

Answered: Bold Vision, Inc. must purchase toner…

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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Similar questions

The two-bin approach is used to control inventory for a particular low-cost component. Each bin holds 1000 units. The annual usage of the component is 40,000 units. Cost to order the component is around $50. (a) What is the imputed holding cost per unit for this data? (b) If the actual annual holding cost per unit is only 5 cents, what lot size should be ordered? (c) How much more is the current two-bin approach costing the company annually, compared to the economic order quantity?
Norris Harrell’s Computer Store in San Fernando sells a printer for $200. The annual demand for this is 600 units, with a standard deviation of 1.5 units daily. The holding cost is $20, while the cost of ordering is $60 per order. Currently the company is ordering 12 times per year. There are 250 working days per year and the lead time is 10 days. a. Given the current policy of ordering, what is the total ordering and holding costs? b. If the company uses the absolute best inventory policy, what would be the total ordering and holding costs?
A product is produced in batches. Batch size = 2000 units. Annual demand = 50,000 units, and unit cost of the product = $4.00. Setup time to run a batch = 2.5 hr, cost of downtime on the affected equipment is figured at $250/hr, and annual holding cost rate = 30%. What would the annual savings be if the product were produced in the economic order quantity?
The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005? OA. $2050 O B. $1360 O C. $1697 O D. $825 O E. $1200
9. A local retailer anticipates an annual demand 12000 units of a product. The retailer allows shortages for that product, and these shortages are backordered at a rate of 3 OMR per unit backordered. The cost of ordering is 200 OMR, whereas, the annual holding cost is 1 OMR per unit. The retailer operates 300 days per year. What is the optimal time between two consecutive order in weeks, assume 52 weeks in a year? Round - up to the nearest integer ?? a. 11 b. 13 c. None is correct d. 10 e. 12 f. 0
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3,600 cases. A case of the soft drink costs R&B $4. Ordering costs are $22 per order and holding costs are 23% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy: a. Economic order quantity. If required, round your answer to two decimal places.Q = b. Reorder point. If required, round your answer to the nearest whole number.r =c. Cycle time. If required, round your answer to two decimal places.T = daysd. Total annual cost. If required, round your answer to two decimal places.TC = $
A company annually uses 1,200 of a certain spare part that costs $25 for each order and has a $24 annual holding cost. Find the economic order quantity, the annual ordering cost, and the annual holding cost.
A manufacturer’s annual demand is 6000 units. The current units per order is $100. The setup cost is $50 per order and the holding cost is $7 per unit. The cost per unit is $2.50. The Number of work days is 250 per year. What is the annual setup cost? What is the annual holding cost? What is the optimal order quantity (EOQ)? Using the EOQ, how many orders should be placed per year? What is the interval between orders? What is the inventory administration cost? What is the total cost of inventory?
The Hodson Gallery and Art Museum distributes a printed guide for its visitors. There are about 18000 visitors per year. Holding costs for the brochures are 20% and it costs $30 to place an order with the printer. A. Assuming the cost for each guide is $2.50, how many should be printed at a time? B. Now assume the printer has offered the following discount schedule: Category Order Size Unit Cost 1 0 - 1499 $2.50 2 1500 - 2999 $2.20 3 3000 and over $1.80 Now how many brochures should be printed at a time?
A company uses a special widget (SP) in its production process. The company uses 100 SP units per month in a fairly uniform production process. Each SP unit costs R30. Due to the stringent controls associated with the ordering of the widget the order cost is R300 per order. The widget requires special handling and refrigeration and the cost of holding inventory is estimated to be R200 per unit year. Which order size would you recommend that the company use? Suppose the supplier of the special widget offers the company a reduced purchase price of R29/widget, but they need to order 100 or more at a time. Would you recommend that the company accept this offer? Annual demand Inventory carrying cost Order cost Purchase price 1200 widgets (100 x 12) R200/widget R300/order R30/widget
Peter operates an ice cream shop and needs to order milk from a dairy supplier. The average daily milk consumption is 9 gallons, and the standard deviation is 2 gallons. The delivery time is 3 days on average, with a standard deviation = 1 day. Peter can place an order at any time, and he decides the order quantity = 100 gallons. What is the reorder point if he wants to keep the 95% service level?
Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. Upon hearing that Ross White is considering the producing the brackets in-house, the supplier has notified Ross that the purchase price would drop from $15 per bracket to $14.50 per bracket if Ross purchase the brackets in lots of 1000. After analyzing the cost of the various options for obtaining the brackets, Ross White recognizes that although he knows the lead time is 2 days, the average daily demand usually varies. Ross has kept careful records and has determined that the average daily demand is normally distributed with a standard deviation of 2.5 units. If Ross would like to maintain a service level of 90 %,…

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