Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 130 cartons per week for which Haley pays $25 per carton. Inbound shipments from thevendor average 1,250 cartons with an average lead time of 2 weeks. Haley operates 52 weeks per year; it carries a 3-week supply of inventory as safety stock and no anticipation inventory. Thevendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 100 cartons.Haley believes that they will be able to reduce safety stock to a 1-week supply. 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 bycartons. (Enter your response as a whole number.)

An estimate of the quantity or worth of inventory a business holds over a given period of time is…

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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Explain what is the origin and basic concepts of inventory problems ?
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Jill's Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows: a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point? b. Find the total inventory costs if using inventory policy. This is a case considering safety stock (make sure to use the right formulas) Holding cost per unit per year is given as a percentage of item cost ITEM TEGDIW WIDGET Annual Demand 10,000 5,000 Holding cost (% of item cost) 20% 20% Set up or order cost $150.00 $25.00 Lead Time 4 weeks 1 week Safety stock 55 units 5 units Item cost $10.00 $2.00
Sam's Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: ≻Demand=75 bags/week ≻Order cost=$55.00/order ≻Annual holding cost=25 percent of cost ≻Desired cycle-service level=80 percent ≻Lead time=4 weeks (24 working days) ≻Standard deviation of weekly demand=15 bags ≻Current on-hand inventory is 320 bags, with no open orders or backorders. Part 2 a. Suppose that the weekly demand forecast of 75 bags is incorrect and actual demand averages only 50 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $enter your response here higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) a. What is the EOQ? What would the average time between orders (in weeks)? b. What should R be? c. An inventory withdraw…
PART A Speedy Bicycle Company (SBC) is a wholesale distributor of a wide variety of bicycles and bicycle parts. The most popular model is the Dragonfly, which sells for $170. All manufacturing is done at a plant in China, and shipment takes a month (30 days) from the time an order is placed. The estimated order cost is $75, including customs clearance. SBC's cost per bicycle is 65% of retail price, and inventory carrying cost is 11% per year of SBC's cost. If the company cannot fulfill a retail order, the retailer will get the shipment from another distributor and SBC loses that business. SBC is planning inventory for 2023 based on forecasted demand and wants to maintain a 93% service level to minimize lost orders. The company has 300 working days per year. 2021 Forecasted Demand for the Dragonfly Bicycle Model: F A J 15 58 J 8 M 31 M 96 J 59 38 A 23 S 16 0 14 N 26 D 41
The distribution manager for Putnam Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale value $100 Annual demand 50,000 units Std. Deviation of Demand 30 units per day Working year 250 days Production lead time 9 days Ordering cost for production $1,800 Holding cost per unit per year 20% of value Desired service level 96 percent: If Putnam wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
The distribution manager for Divine Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale Value $100 Annual Demand 50,000 units Standard Deviation of Demand 30 units per day Working Year 250 days Production Lead Time 9 days Ordering Cost for Production $1,800 Holding Cost per unit per year 20% of value Desired Service Level 96 percent If Divine decides to use a continuous review system, what should be economic order quantity, safety stock, and the reorder point? If on the other hand, Divine wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
Describe vendor-managed inventory (VMI). How is it related to outsourcing?
Discuss the ABC inventory classification system and indicate it's advantages?
Briefly and exactly explain how does the inventory management impacts the performance of the supply chain .
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 170 cartons per week for which Haley pays $25 per carton. Inbound shipments from the vendor average 950 cartons with an average lead time of 5 weeks. Haley operates 52 weeks per year; it carries a 6-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to to week. Further, they will be able to reduce shipments to 300 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?
Retail business's inventory includes goods in process and raw material. True False

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