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$11.25 per bag. The following information is available about these bags. Refer to the standard normal table for z-values.Demand 85 bags/week- Order cost $56/order> Annual holding cost = 28 percent of cost> Desired cycle-service level = 98 percent> Lead time=1 week(s) (5 working days)-Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 300 bags, with no open orders or backorders. e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ?The annual holding cost with the EOQ is $. (Enter your response rounded to two decimal places.)

Given: Annual demand D 4420 Holding cost H 3.15 Ordering cost S 56 lead time L 5 Number…

Answered: e. What would be the annual cost saved…

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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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.
A gift shop sells Little Lentils dolls at a steady pace of 10 per day, 310 days per year. The cost of the dolls is $5, and the gift shop uses an annual interest rate of 20 percent to compute holding cost. Question 1: Assuming an order quantity of 250 dolls and the cost of placing an order of $10, what is the average annual ordering cost (cost to place orders, not purchasing cost)? Question 2: Assuming an order quantity of 250 dolls, what is the average annual inventory holding cost?
Do you think the safety stock (safety inventory) could be negative? What is the meaning of a negative safety inventory (hint: safety stock is the difference between the optimal inventory and the average demand)?
Economic Order QuantityA pipe manufacturer requires a chemical for making plastic at the rate of 6000gallons per year. The cost of keeping the chemical storage is $10 per gallon peryear. Ordering costs are $200 per order. The chemical is bought at $45 pergallon.What is the EOQ and the Annual Total Cost?
Average daily demand (d) 80 units Standard deviation of daily demand (σd) 24 units Average lead time (LT) 6 days Standard deviation of lead time (σLT) 2 days Service level 91% 1. What is the required safety stock at a 91 percent service level? _______ units 2. What is the reorder point? _______ units
Mr. Ahmed works in a bakery which operates days a week, 49 weeks a year. The bakery needs flour which is delivered to the bakery at 7.5 OMR each order. Mr. Ahmed needs 10 bags of four10 kg weight each bag. Each bag costs OMR 12. The annual holding cost per bag is 19% of the purchase price of bag. What will be the total annual variable cost, if banks only offer maximum of OMR 1500 for purchasing in a single order? a 368.2 b.318.9 c.320.55 d. 331.80 e.None is correct
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?
Please do not give solution in image format thanku Yuliia is Guest Experience Director at the Lego store. Daily demand averages 450 kits, with a standard deviation of 50 kits. Lead time to receive new shipments is 12 days. Currently, the store policy is to have a level of service of 99.65%. How many units of safety stock will they need to carry? NOTE: This question is asking for SAFETY STOCK, not Reorder Point.
When an firm put aside some extra inventory that serves as an insurance against flucation in demand is called Wastage Inventory O Minimum Level Safety Stock EOQ
A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how much is delivered) and $1.20 per gallon. Annual holding cost is 35% of the price per gallon. Usage is 250 gallons/week. d) If order quantity is 2500 gallons, what is the sum of the ordering and holding costs PER GALLON? e) If orders are for EOQ amount, what is the annual cost of the inventory system as a percentage of the annual purchase cost?
The annual demand for the Super Thrive brand plant food manufactured by Cumberbatch and Dunst Indoor Plants Company is 120,000 pounds. The annual holding cost (also known as carrying charge) is $0.05 per pound, and Operations Manager Kirsten Benedict has calculated the cost of setting up machinery for making the plant food to be $20. 1) What is the annual holding (carrying) cost for the EOQ that you calculated ? plz send answer fast.

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e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ? The annual holding cost with the EOQ is $(Enter your response rounded to two decimal places.)