Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 140 cartons per week for which Haley pays $30 per carton.Inbound shipments from the vendor average 1,050 cartons with an average lead time of 2 weeks. Haley operates 52 weeks per year; it carries a 3-week supply ofinventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that willreduce lead time to one week. Further, they will be able to reduce shipments to 500 cartons. Haley believes that they will be able to reduce safety stock to a 1-weeksupply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?The changes decrease Haley's average aggregate inventory level by cartons. (Enter your response as a whole number.)The changes decrease Haley's average aggregate inventory value by $(Enter your response as a whole number.)

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Answered: Haley Photocopying purchases paper from…

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 following data has been provided relating to one of the essential supplies that is utilized for Barloworld logistics operations. usage is approximately 10 brackets per day during the year. the brackets are purchased from a supplier 90km away and the costs incurred include holding costs per bracket per year of R1.50, order cost per order of R18.75. the lead time is 2 days and working days per year is 250 days. advise the management on the following inventory management issues. Examine the factors that you will prioritise at Barloworld in ensuring that inventory management adds value to the organisation and improves on its competitive advantage. what would be the economic order quantity? the annual inventory holding costs. how many orders would be made each year? what would be the annual order cost? what is the time between orders and the reorder point (ROP)?
Calculate total annual cost for the alternative suppliers for aproduct with following characteristics: montly demand; mean: 5000, standard deviation 2000 Holding cost: 30% Cycle service level: 98% Using EOQ formula, find the lot size. Don’t forget to add ordering cost to the total cost! Supplier 1 Supplier 2 Supplier 3 Ordering Cost(per order ) 1000 2000 5000 Cost 10 9 8 Average Lead Time ( month ) 0.5 2 2 Lead time std deviation ( month ) 0.5 1 2
Need help solving Problem 1, parts A, B and C.
3. A restaurant serves an average of 623 desert (leche flan) servings every week. The manager places an order of 1,000 servings every time she calls the supplier. Record shows that ordering cost per order is PhP30, and the holding cost per serving per year is PhP5.00. a. What is the current annual inventory costs incurred by the restaurant. b. If EOQ is used, what will be the inventory cost incurred by the restaurant each year? c. What order quantity would you recommend for the restaurant? Why?
Alyce operates a factory that manufactures pencil boxes which she sells to stationery store. Additional information: Annual demand is 1 million pencil boxes per year Setup cost is $5000 per batch Holding cost is $3 per year for each pencil boxes Maximum production capacity is 2 million pencil boxes per year Currently, pencil boxes are manufactured in 10 batches. 1 a) Find the optimum production quantity that Alyce should produce to minimize her costs. b) Calculate the current annual holding cost and setup cost. c) Draw a diagram showing stock level for the first batch, assume 1 year has 250 working days
Manufacturing company uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of ten boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery. Ordering cost is $2, and annual holding cost is 20 cents per box. Determine the economic order quantity, assuming a 52-week year. If the copy center reorders when the supply on hand is 21 boxes, compute the risk of a stockout. If a fixed interval of seven weeks instead of an ROP is used for reordering, what risk does the copy center incur that it will run out of stationery before this order arrives if it orders 60 boxes when the amount on hand is 34 boxes?
Chicago's Hard Rock Hotel distributes a mean ofI ,000 bath towels per day to guests at the pool and in their rooms.This demand is normally distributed with a sta ndard deviationof 100 towels per day, based on occupancy. The laundry firmthat has the linens contract requires a 2-day lead time. The hotelexpects a 98% service level to satisfy high guest expectations.a) What is the safety stock?b) What is the ROP?
PS 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
A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug. Demand (D) 85 tablets/week Working weeks per year 52 weeks Unit holding cost per year (H) $6 Order cost (S) $44/order Standard deviation of weekly demand (sd) 15 tablets Lead time (L) 2 weeks Desired cycle service level 95% If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point? If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
Greek Circle manufacturing makes and sells specialty hubcaps for the retail automobile after market. GC’s forecast for its wire-wheel hubcap is 2,000 units next year, with an average daily demand of 4 units. However, the production process is most efficient at 8 units per day. If the Setup costs are $10, the Carrying Costs are $0.50 per unit per year, what is the Optimum Production Order Quantity? So the company produces 8 per day but uses only 4 per day. The company wants to solve the optimum number of units per order. (Note. The plant schedules production of this hubcap only as needed, during the 250 days per year the shop operates). If the Setup costs are $10, the Carrying Costs are $0.50 per unit per year, what is the Optimum Production Order Quantity.
Problem 13-16 The McDonald's fast-food restaurant on campus sells an average of 4,800 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 465 pounds of hamburger in stock. Assume that the hamburger patties cost $3 a pound and there are 52 weeks in a year. a. What is the inventory turnover for the hamburger patties? (Round your answer to 2 decimal places.) Inventory turnover per year b. On average, how many days of supply are on hand? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Average days of supply
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