Joanie Fabrics makes custom purses and uses 800 yards of fabric per year. The fabric used for the purses has a fixed cost of $50 per order, a carrying cost of $2 per yard per year. When they place an order, it takes 5 days before the shipment is received. Joanie likes to keep 10 days usage in inventory as her safety stock because her customers would be very upset if she runs out of their favorite purses. What is the EOQ? What is the average level of inventory? (365 day year) What is the reorder point?
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- A grocery store orders frozen pies in batches from a bakery and sells them in the grocery store. Storing one frozen pie for a year costs $0.85. When the grocery store reorders pies, there is a fixed cost of $8.05 per order as well as $1.15 per pie. Each year, they sell 3500 frozen pies. What is the optimal number of pies to order in each order to minimize their total inventory costs.Mr. TV is concered about his inventory of Soni tvs. He wants to have at least 3,000 tvs available at a given time. It costs the firm $20 to place an order. It sells 50,000 tvs a year and it costs $20 in storage and insurance per tv per year. How many tvs should Mr. TV order at a time? How many tvs does Mr. TV have on average instock?The Donnie Co. and the Thea Co. manufacture fairly similar remote-controlled toy cars. The Tristan Co. a retailer of children's toys, expects to buy and sell 4,000 of these cars each year. Both Donnie and Thea can supply all of Tristan's needs, and Tristan prefers to use only on supplier for these cars. An electronic hookup will make ordering costs negligible for either supplier. Tristan wants 80 cars delivered 50 times each year. Tristan obtains the following additional information. Donnie Thea purchase price of the car. $50 $ 49 relevant incremental carrying cost of insurance, materials handling breakage, etc. per car per year. $11 $10 Expected number of stockouts per year resulting from late 20 cars 50 cars deliveries. Stockout costs per car $25 $26 Expected number of cars sold that will be returned owing to quality and other problems 40 cars 140 cars Additional to Tristan of handling each returned car $21 $21 Inspection costs per delivery $20 $28 Tristan requires a rate of return…
- To make extra money, Michael Smith sells fresh cookies every day from in front of a store on Main St. He sells the cookies for $.25 each. It costs him $1.20 to bake a dozen. Last year, Michael worked for 200 days. Based on his sales data, he determined that on a given day the demand for cookies is for either 5 dozen, 6 dozen, or 7 dozen, with probabilities 0.5, 0.3, 0.2 respectively. Any unsold cookies are given away. a) Draw a payout table that will help Michael decide how many dozen to bake tomorrow. b) What are the expected values associated with each option? c) Which option is the riskiest? Please use excel if you canCharlotte sells widgets which cost $50 each to purchase and prepare for sale. Annual sales are 10,000 widgets, carrying cost are 15% of inventory costs, and Charlotte incurs a cost of $25 each time an order is placed. Suppose her supplier decides to offer a 3% cash discount if products are ordered in increments of 1250. How many widgets should Charlotte order each time an order is placed to minimize costs? I have submitted this question twice and both times was answered with how many orders of 1250 will satisfy the demand of 10,000 widgets. I need to know how to figure out HOW MANY WIDGETS PER ORDER to minimize costs.Sharon sells authentic Amish quilts on her website. Suppose Sharon expects to sell 1,600 quilts during the coming year. Her average sales price per quilt is $325, and her average cost per quilt is $125. Her fixed expenses total $160,000. Compute her margin of safety a. in units (quilts). b. in sales dollars. c. as a percentage of expected sales.
- Scrambling, Karen has gone back to her original supplier of collars, which thankfully now has a large quantity it can ship to her. These collars cost $0.50 each, and the company can get enough of them to go back and fix the collars on the recently ruined batch, plus put some into the warehouse for a future batch. In order to fix the botched T-shirts, though, Metlock-T will need to incur an extra $2 per shirt in labor costs to carefully remove the bad collars and re-attach the new ones. These reworked shirts should still be salable to retailers at the regular selling price. How much gross margin per unit will Metlock-T generate if it fixes and sells these reworked shirts? (Round answer to 2 decimal places, e.g. 15.25.) Gross margin $ /unitLila battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of forms used in the placing order, and so on. Furthermore, she estimates that the cost of carrying one screw in theinventory for an year is one-half of one cent. Assume that the demand is constant throughout the year. (a)How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? (b)How many orders per year would be placed? What would the annual ordering cost be? (c)What would the average inventory be? What would the annual holding cost be?Your cousin’s business is up and running. She is meeting inventory management issues and wants to solve the repeated problem once and for all. Each period, her company starts with 350 metal bars in stock. This stock is depleted every two weeks and reordered. The calendar year is comprised of 52 weeks.It costs $1.50 to hold every metal bar over the year. Every order comes at a fixed cost (unloading, storage and record of receipt) of $300.00. a) Calculate the total annual carrying costs and the restocking costs b) Explain in few sentences why this business does not follow an economically advisable strategy
- Your cousin’s business is up and running. She is meeting inventory management issues and wants to solve the repeated problem once and for all. Each period, her company starts with 350 metal bars in stock. This stock is depleted every two weeks and reordered. The calendar year is comprised of 52 weeks.It costs $1.50 to hold every metal bar over the year. Every order comes at a fixed cost (unloading, storage and record of receipt) of $300.00 Your cousin places an order for 540 units of metal bar at a unit price of $62.00. The supplier offers terms of 1/10, net 30 A) Indicate how much time can you wait to pay before the account is overdue. If you take the full period, determine how much you will have to remit. b) Identify the discount being offered and the period left for payment to get the discount. If you do take the discount, determine how much you will have to remit.Problem Solving: Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year. a. How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? b. How many orders per year would be placed? What would the annual ordering cost be? c. What would the average inventory be? What would the annual holding cost be?- After closing her beloved restaurant due to the pandemic, Kiki started to sell her signature sauces to consumers. The ingredients for a sauce bottle cost $1.25 and packaging costs another $0.50. A distribution company handles the storage and distribution of the sauce and charges $0.75 or each bottle. Kiki has calculated that the overhead cost is $5000 per month. She sells one sauce bottle at $5.00 to the customers. a. How many sauce bottles must Kiki sell to break-even? What is the total revenue for breakeven? b. If she can sell only 1000 bottles, what should be the selling price to break-even?