M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 675 units per month. The item can be purchased from either Allen Manufacturingor Baker Manufacturing. Their price lists are shown in the table. Ordering cost is $55, and annual holding cost per unit is $4.2Allen Mfg.Quantity1-499500-9991000+a) What is the economic order quantity if price is not a consideration?Baker Mfg.Unit Price$16.0015.5015.00Unit Price$16.1015.6015.10units (round your response to the nearest whole number).Quantity1-399400-799800+

Economic Order Quantity (EOQ) is an inventory management technique that identifies the optimal…

Answered: M. P. VanOyen Manufacturing has gone…

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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Similar questions

Given the following information for a purchased component, what is the total annual cost for the item? Annual demand = 500,000 Purchase price = $10 per unit Order quantity 100,000 • Order cost = $5 per order • Annual holding cost per unit = = $2 . $2.510,100 O $510,025 $510,250 O $5,100,250 O $5,100,025
Current decision to buy: Ross White's machine shop uses 300 brackets each month during the course of a year. This usage is relatively constant throughout the year. Currently, these brackets are purchased from a supplier 100 miles away for $25 each and the lead time is 2 days. The holding cost per bracket per year is $3.75 (15% of the unit cost) and the annual ordering cost per order is $18.50. There are 240 working days per year. Possible future decision to make in-house: Ross White is reconsidering his decision of buying the brackets and is considering making the brackets in-house. He has determined the set up costs would be $22.50 in machinist time and lost production time. Forty eight brackets could be produced in a day once the machine has been set up. Ross estimates that the cost (including labor and materials) of producing one bracket would be $22.85. The holding cost would be 12% of the cost. What is the EOQ given Ross' current decision to buy the brackets? What is the…
A. Ltd buys 400 units of an item at a purchase cost Sh.5000 per unit and ordering cost of Sh.2,000 per order placed. The carrying cost is estimated at 24% of cost of an item p.a. The Co. has received a 2% discount offer for purchases of 100 or more units. Required: a) Determine the best inventory policy for this item. b) Determine the discount level at which the firm will be indifferent between taking and not taking the discount offer.
Develop an EOQ solution and calculate total relevant costs for the data in the preceding table.
Scary Clowns, Inc., supplies special makeup cases to a major circus. The circus orders its EOQ of 800 cases every 3 months from Scary Clowns. Scary Clowns incurs setup costs of $5,000 every time it produces these cases, and its annual holding cost per case is $14. Question content area bottom Part 1 a. Which inventory model fits the best to this problem? A. All-units quantity discounts model B. Incremental quantity discounts model C. One-time sale model D. EOQ model E. POQ model F. Lumpy demand model b. Scary Clowns should produce enter your response here units in each batch (round your response to the nearest integer). c. The total annual setup and holding cost for Scary Clowns using this policy is $enter your response here (round your response to the nearest
f2 Same problem statement: Weekly demand for DVD-Rs at a retailer is normally distributed with a mean of 1,000 boxes and a standard deviation of 150. Currently, the store places orders to the supplier, with a reorder point of 4,200 boxes. The order quantity to the supplier is fixed at 5,000 boxes. Replenishment lead time is 4 weeks, fixed order cost per order is $100, each box costs the retailer $10, and the inventory holding cost is 25% per year. Assume 50 weeks in a year. Given the problem parameters, what is the optimal order quantity the retailer should order? Numeric Response f3 2040 f4 f5 40 f6 0 4- f7 ♫+ f11 W f12. X insert prt sc + = O delete ← backspace home num lock
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $9.70 per stone for lesser quantities. The jewelry firm operates 230 days per year. Usage rate is 16 stones per day, and ordering costs are $45.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do…
4) Rane Brake Linings gathered information for its brake lining components as presented in the table below. How would the firm classify these items according to an ABC classification system? Initial Information Part # Unit Cost Annual Demand 10 10 200 11 30 125 12 9 100 13 12 5000 14 50 195 15 6 300 16 100 70
K Cesar Rego Computers, a Mississippi chain of computer hardware and software retail outlets, supplies both educational and commercial customers with memory and storage devices. It currently faces the following ordering decision relating to purchases of disks: D S I Purchase price Discount price Quantity needed to qualify for the discount = 5,900 disks. What is the EOQ? 36,100 disks $25 22% $0.87 $0.81 EOQ = units (round your response to the nearest whole number). ncorrect
Suppose that we would like to determine Reorder Point for the product. From the historical data the manager determined demand during lead-time for that product fits Normal distribution with a mean of 200 and standard deviation of 10 products. The maximum stock out risk is 10%. Answer the following questions according to the (Q, R) system. a) Find the safety stock if the lead time is 2 weeks. b) Find the reorder point. c) Find the reorder point if the stock out risk decreases to 1%. Comment on the result.

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