XYZ company has determined that the annual demand for type A material is 20,000 pounds. Salma, whoworks in her brother's factory, is in charge of purchasing. She estimates that it costs $15 every time anorder is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on.Furthermore, she estimates that the cost of carrying one pound in inventory for a year is 0.05 $.Assume that the demand is constant throughout the year. (Note: $ is a dollar sign)d) What would the annual ordering cost be?e) What would the average inventory be?f) What would the annual holding cost be?See equations below if needed:Number oforders placedper yearAnnualOrderingcostAnnualhdding=Annual demandNumber of unitsin each orderAverageinventoryOrdering costper orderOrdering costper order(Carrying costper unit=b.c

An Economic Order quantity(EOQ) can be identified using the standard equation which considering…

Answered: d) What would the annual ordering cost…

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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Experience suggests that usage of surgical gloves at a hospital can be approximated by a Normal distribution with a standard deviation of one-half box of surgical gloves per day and a mean of five boxes of surgical gloves per day.If ordering cost is $10 per order, annual holding cost is $10 per box, two days are required to fill an order surgical glove. a) Determine the economic order quantity, (250 workdays a year). b) If the hospital reorders when the surgical gloves on hand and on order is 12 boxes, calculate the risk of a stock-out during a lead time. c) What shortage risk does the hospital incur if it orders 36 boxes when the amount on hand is 12 boxes If a fixed interval of seven days, instead of the EOQ/ ROP model, is used for reordering
A regional supermarket is open 360 days a year. Daily use of cash register tapes is 15 rolls. The purchase price of the tape is $ 2 and inventory carrying cost is 60 cents per roll a year. Ordering cost is $ 20 per order. The order replenishment lead time is 7 days. What is the Order Point (re-order point) assuming demand is known and constant?
Al Fursan Inc. needs 310 kgs of a material per month (four weeks). It costs RO 10 to make and receive an order, and it takes 16 work days to receive it. The annual holding cost is 25 % of purchase price The price RO1 per kg. The company is operating 6 days per week What is the minimum annual total holding and ordering cost? Round-up to the nearest integer?
William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D Ordering cost S Holding cost H 19,100 units/year $26/order $4/unit/year
The Mcdonald’s fast-food restaurant on campus sells an average of 7,200 quarter pound hamburgers a week. Hamburger patties are resupplied twice a week, and on average the store has 740 pounds of hamburger in stock. Assume that hamburger patties cost $3 a pound and there are 52 weeks in a year. What is the inventory turnover for the hamburger patties? (Round 2 decimal places) On average how many days of supply are on hand? (Round 2 Decimal places)
7. Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. ≻Demand = 95 bags/week ≻Order cost = $57/order ≻Annual holding cost = 30 percent of cost ≻Desired cycle-service level=98 percent ≻Lead time = 1 week(s) (5 working days) ≻Standard deviation of weekly demand = 20 bags ≻Current on-hand inventory is 350 bags, with no open orders or backorders. d. The store currently uses a lot size of 490 bags (i.e., Q=490). What is the annual holding cost of this policy? (Enter your response rounded to two decimal places.) and (Enter your response rounded to two decimal places.) **select the correct multiple choice answer** e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ? (Enter your responses rounded to two decimal places.)
es Garden Variety Flower Shop uses 930 clay pots a month. The pots are purchased at $3.90 each. Annual carrying costs per pot are estimated to be 10 percent of cost, and ordering costs are $10 per order. The manager has been using an order size of 2,000 flower pots. a.What additional annual cost is the shop incurring by staying with this order size? (Round your optimal order quantity to the nearest whole number. Round all other intermediate calculations and your final answer to 2 decimal places.) Additional annual cost b.Other than cost savings, what benefit would using the optimal order quantity yield (relative to the order size of 2,000)? (Use the rounded order quantity from Part a. Round your final answer to the nearest whole percent.) About % of the storage space would be needed. Check my
Knowing both "carrying costs" and "ordering costs" are important when answering inventory questions about optimal order quantity. Why?
Sumco's annual demand is expected to increase from 1,000 units to 1,500 units, the ordering cost is reduced to $8 per order and the average carrying cost per unit per year is increased to $0.80. Under these new conditions: A) Calculate the new EOQ. B) Calculate the Annual Ordering Cost, the Annual Holding Cost and the Total Annual Cost. C) Plot a graph showing Ordering Cost, Holding Cost and Total Cost as a function of Q for this problem Predictions: On acer
Which types of data are present in inventory records?
Your company has the following items in inventory: Unit Cost $9 $90 $6 Item A B с D E F G H Annual Demand 1200 100 4500 400 35 250 1000 100 $150 $2000 $120 $90 $75 a) What is the annual dollar volume for all items b) Perform an ABC analysis on the data. Which are the A items, the B items and the C item: c) Why is it desirable to classify items into groups, as the ABC classification scheme does? d) Define and discuss the term "productivity" with help of productivity equation.
The electrolyte drink for our beloved NMSU soccer team average normally distributed demand of 5 units and a standard deviation of 1 unit. Lead time for replenishment is fixed at four days. (a) What is the reorder point if there is no safety stock? (b) What is the reorder point if the service level is 80 percent? (c) How much more safety stock is required if the service level is raised from 80 percent to 90 percent?

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d) What would the annual ordering cost be? What would the average inventory be? e) f) What would the annual holding cost be? See equations below if needed: