Company ABC utilizes an inventory system in which order gets placed after uniform timeduration. Which of the following represents the inventory policy used by the Company?a) (0, x) Modelb) EOQ Modelc) Fixed period modeld) Fixed quantity model

The inventory policies or models are simply the strategies employed by the companies to determine…

Answered: Company ABC utilizes an inventory…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Dalia, the office manager of a desktop publishing outfit, stocks replacement toner cartridges for laser printers. Demand for cartridges is approximately 30 per year and is quite variable (Le., can be represented using the Poisson distribution). Cartridges cost $100 each and require three weeks to obtain from the vendor. Dalia uses a (Q, r) approach to control stock levels (a). If Dalia wants to restrict replenishment orders to twice per year on average, what batch size Q should she use? If she wants to ensure a service level (i.e., probability of having the cartridge in stock when 2 out of 2 needed) of at least 98 percent, what reorder point r should she use? (Hint: Use Table 2.6.(b). If Dalia is willing to increase the number of replenishment orders per year to six, how do Q and r change? Explain the difference in r.
= = +E v No Spacing Normal Aav Replace Heading 1 Reuse Dictate Editor Files Paragraph Styles Editing Reuse Files Voice Editor Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation 9999 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. Text…
In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEM NUMBER ANNUAL USAGE ANNUAL ITEM USAGE NUMBER 1 $ 1,700 11 $ 13,400 2 12,300 12 800 3 2,400 13 42,700 4 50,900 14 10,200 5 13,100 15 1,400 6 900 16 10,500 7 2,200 17 4,200 8 11,300 18 62,000 9 5,300 19 3,700 10 15,400 20 3,100 a. Classify each item in inventory using an ABC plan.
Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffler. Annual demand Standard deviation of daily demand Item cost Annual holding cost 5,700 mufflers 5 mufflers per working day 30 per muffler 30% of the item value Use the above information to determine the best order size and the reorder point. Order Size = 252, R = 47 Order Size = 243, R = 40 Order Size = 300, R = 46 O Order Size = 302, R = 23 Ordering cost Service probability Lead time Working days $ 50 per order 90 % 2 working days 300 per year
Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set (BB-1 stands for Body Beautiful Number 1). The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year. The stockout cost for BB-1 is estimated to be $50 per set. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1: Demand During Lead Time 40 50 60 70 80 90 The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB-1? The optimal quantity of safety stock which minimizes expected total cost is Probability 0.1 0.2 0.2 0.2 0.2 0.1 sets (enter your response as a whole number).
Southern Markets, Inc. is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? b. The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.
Define each of the following terms: c. Economic Ordering Quantity (EOQ); EOQ model; EOQ range
EOQ, reorder point, and safety stock Alexis Company uses 937units of a product per year on a continuous basis. The product has a fixed cost of $44 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity.
Please do not give solution in image format thanku Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a highspeed modem priced at $360 per unit, the average weekly demand at each distribution center is 85 units. Average shipment size to each distribution center is 450 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipation inventory. Part 2 a. On average, how many dollars of pipeline inventory will be in transit to each distribution center? $enter your response here. (Enter your response as an integer.)
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
The Universal Computer Company uses a newly developed A1 chip in the manufacturer of their tablet computers. The estimated annual demand for this chip is 12,000 units. It is estimated that the cost to place an order is $75, and the holding cost for each chip is $20 per year. The company operates 320 days per year. a. What is the economic order quantity for the A1 chip? b. What is the total cost if the Universal Computer Company orders using the EOQ quantity?
What would be the relationship (one-to-one, one-to-many, or many-to-many) relationship between: Sales and inventory Inventory and Order form Order and Vendor

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Company ABC utilizes an inventory system in which order gets placed after uniform time duration. Which of the following represents the inventory policy used by the Company? a) (Q, x) Model b) EOQ Model c) Fixed period model d) Fixed quantity model