Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.PARAMETERItem costOrder costAnnual holding costAnnual demandAverage weekly demandStandard deviation of weekly demand.Lead time.Service probabilityOptimal order quantityReorder pointunitsunitsVALUE$12.00$194.00/order21% of item cost24,700 units494 /week20 units2 week95%a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find your z-value and then round that z-value to 2 decimal places. Do not round any other intermediate calculations. Round your final answers to the nearest wholenumber.) b. Determine the annual holding and order costs. (Do not round any intermediate calculations. Round your final answers to 2decimal places.)Holding costOrdering costc. Assume a price break of $55 per order was offered for purchase quantities of 2,000 units per order. If you took advantage of thisprice break, how much would you save annually? (Do not round any intermediate calculations (including number of setups peryear). Round your final answer to 2 decimal places.)Annual savings

Inventory management refers to the process of overseeing and controlling the flow of goods and…

Answered: Given the following information,…

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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Rick Jerz is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is 5,000 units; carrying cost is $50 per unit per year; order costs for his company typically run nearly $30 per order; and lead time averages 10 days. (Assume 250 working days per year.) a) The economic order quantity is 77 units (round your response to the nearest whole number). b) The average inventory is units (round your response to the nearest whole number). c) The optimal number of orders per year is orders (round your response to the nearest whole number). d) The optimal number of working days between orders is days (round your response to two decimal places). e) The total annual inventory cost (carrying cost + ordering cost) is $ (round your response to two decimal places). f) The reorder point is units (enter your response as a whole number).
Problem 20-30 (Algo) It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for the various items have been correctly established. You decide to test one Item and choose Michelin tires, XW size 185 x 14 BSW. A perpetual inventory system has been used, so you examine this, as well as other records, and come up with the following data: Cost per tire Holding cost Demand Ordering cost Standard deviation of daily demand Delivery lead time Order quantity $ tires 50 each percent of tire cost per year Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 90 percent. Assume the demand occurs 365 days per year. a. Determine the order quantity. (Round your answer to the nearest whole number.) 15 1,100 per year $ 22 per order 4 tires 5 days
21- Which one of the following represent FIFO method of inventory evaluation? a. Old items remain in inventory b. Old merchandise is sold first c. New merchandise is sold first d. Average number of goods are sold
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2. The inventory manager of Daraz hopes to achieve a better allocation of inventory control efforts by adopting an A-B-C approach to inventory control. Given the monthly usages in the following table, classify the items in A, B, and C categories to Taka usage Item X1 X2 X3 Х4 X5 X6 X7 X8 Usage 150 70 140 270 200 400 700 650 Unit 755 890 1625 210 410 60 30 25 Cost
Reorder Point Ordering: Average demand per day () is 25 units, with a std. dev. of (od) 15 units. Lead time (LT) is 49 days. Find demand during lead time (DDL), safety stock (SS) and reorder point (ROP ) for 4-sigma (z = 4). DDL= 500 units, SS = 1225 units, ROP = 1645 units DDL= 1,645 units, SS=420 units, ROP = 1225 units DDL= 1,225 units, SS = 420 units, ROP = 1645 units DDL= 0 units, SS = 1225 units, ROP = 420 units DDL= 420 units, SS = 1645 units, ROP = 420 units
A store has collected the following information on one of its products:Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a. If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?
Charlie’s Pizza orders all of its pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every four weeks to take orders. Because the orders are shipped directly from Italy, they take three weeks to arrive. Charlie’s Pizza uses an average of 150 pounds of pepperoni each week, with a standard deviation of 30 pounds. Charlie’s prides itself on offering only the best-quality ingre- dients and a high level of service, so it wants to ensure a 98 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 500 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order?

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