(EOQ calculations) A downtown bookstore is trying to determine the optimal order quantity for a popular novel just printed in paperback. The store feels that the book will sell afour times its hardback figures. It would, therefore, sell approximately 4,000 copies in the next year at a price of $1.50. The store buys the book at a wholesale figure of $1.Costs for carrying the book are estimated at $0.10 a copy per year, and it costs $20 to order more books.a. Determine the EOQ.b. What would be the total costs for ordering the books 1, 4, 5, 10, and 15 times a year?c. What questionable assumptions are being made by the EOQ model?a. What is the economic order quantity (EOQ)?copies (Round to the nearest whole number.)GULD

Answered: (EOQ calculations) A downtown bookstore…

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 Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The optimal order size
A grocery store starts each day with a stock of 245 bananas in their produce section. Daily demand for bananas is normally distributed with a mean of 200 and a standard deviation of 30. What is the store's safety stock for bananas?
An electronics retailer wants to develop an inventory policy to achieve 99% chance of not getting stockouts for a chip. The daily demand for the chip is estimated to be Normal with mean 200 and standard deviation of 20. They count the chip inventory every 2 weeks to place an order, and it takes 11 days for the ordered chips to be delivered. The retailer operates 7 days a week, 365 days a year. They are going to implement an order-up-to model. A) What base stock level should they choose? B) What is the number of chips they would have on order (on average)? C) When they checked their inventory of chips to place a new order, they found that they ran out of stock completely. In addition, they have 10 chips on way to be delivered, while there are five customers who paid for 20 chips in total and are waiting to receive their chips. How many chips should the retailer order?
A coffee shop consumes 350 lbs of coffee per week at a steady rate. The coffee shop buys coffee from a supplier at the cost of $10 per lb, and ordering cost of $5 per order. The supplier takes 8 days to deliver an order (assume that 1 week = 7 days). What should be the reorder point (in pounds) for the coffee shop (i.e., at what level of inventory it should place an order with the supplier).
A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has Co = $24.50 and Ch = $7.The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with ? = 25 and ? = 5. (a)What is the recommended order quantity? (Round your answer to the nearest integer.) (b)What are the reorder point and safety stock if the store desires at most a 4% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.) reorder pointsafety stock (c)If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.) How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)
If EOQ = 289 units, S = $100, and H = $1 per unit per month, what approx. annual demand (D) level would the EOQ model best fit? Pick the closest answer option. EOQ = Sq root of [(2D*S)/H] D = annual demand in units S = cost of placing 1 order; H = cost of holding 1 unit of that item in inventory for 1 year 3596 units 3540.00 units 5011 units 4510 units
What is the average inventory? What is the average flow time? What is the required safety inventory to achieve the desired service level? What is the required re-order point to achieve the desired service level?
A restaurant has an annual demand for 886 bottles of California wine. It costs $2 to store 1 bottle for 1 year, and it costs $10 to place a reorder. Find the optimum number of bottles per order.
A company has a chance to reduce their inventory ordering costs by placing larger quantity orders using the discount schedule below. What should their optimal order quantity be if this company purchases this single inventory item with an e-mail ordering cost of $4, an annual holding cost rate (per unit) of 2% of the price/unit, and an annual demand of 10,000 units? Order quantity (units) Price/unit ($) 0 to 2,499 1.20 2,500 to 3,999 1.00 4,000 or more 0.98
The Fast Service Food Mart stocks frozen pizzas in a refrigerated display case. The average daily demand for the pizzas is normally distributed, with a mean of 8 pizzas and a standard deviation of 2.5 pizzas. A vendor for a packaged food distributor checks the market’s inventory of frozen foods every 10 days, and during a particular visit, there were no pizzas in stock. The lead time to receive an order is 3 days. Determine the order size for this order period that will result in a 99% service level. During the vendor’s following visit, there were 5 frozen pizzas in stock. What is the order size for the next order period?
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) (0, x) Model b) EOQ Model c) Fixed period model d) Fixed quantity model
Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end of the day. Demand for the bread is normally distributed with a mean of 300 and a standard deviation of 30. What order quantity maximizes expected profit for Bakery A? (use the normal distribution table posted on Canvas and round up to the nearest integer)

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