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Q2) Clancy's Motors has the following demand to meet for custom manufactured fuel injector parts. The hokding cost for that item is $2 per month and each setup costs $80. Lead time is 0 months. Cakulate the planned order rekeases using: (a) the EOQ technique, and (b) the POQ technique. And What are the costs of cach phn, inchuding the hokling cost of any inventory kft over after month 7? What techniq ue performance is better. Morth Requirement | 400 | 150 | 200 | 150 | 100 | 150 | 250 || 2 | 3 | 4 | 5 | 6 | 7 Answer: (a) The monthly hokling cost = $2/month Average monthly demand = ??? units The EOQ = ??? units Total inventory hekl = ??? units Setup costs = $??? Hokling cost = $???? Total cost = $???? (b) POQ Interval = ?.??, round to # month Total inventory hekl = ? units Setup costs = $? Hokling cost = $? Total cost - S??

Q2) Clancy's Motors has the following demand to meet for custom manufactured fuel injector parts. The hokding cost for that item is $2 per month and each setup costs $80. Lead time is 0 months. Cakulate the planned order rekeases using: (a) the EOQ technique, and (b) the POQ technique. And What are the costs of cach phn, inchuding the hokling cost of any inventory kft over after month 7? What techniq ue performance is better. Morth Requirement | 400 | 150 | 200 | 150 | 100 | 150 | 250 || 2 | 3 | 4 | 5 | 6 | 7 Answer: (a) The monthly hokling cost = $2/month Average monthly demand = ??? units The EOQ = ??? units Total inventory hekl = ??? units Setup costs = $??? Hokling cost = $???? Total cost = $???? (b) POQ Interval = ?.??, round to # month Total inventory hekl = ? units Setup costs = $? Hokling cost = $? Total cost - S??

Practical Management Science
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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**Title:** Inventory Management Techniques: EOQ and POQ **Problem Statement:** Clancy's Motors needs to meet demand for custom-manufactured fuel injector parts. Each item has a holding cost of $2 per month, and each setup costs $80. The lead time is 0 months. **Objective:** Calculate the planned order releases using the following techniques: 1. **Economic Order Quantity (EOQ)** 2. **Periodic Order Quantity (POQ)** Evaluate the costs of each plan, including the holding cost for any inventory left over after month 7. Determine which technique performs better. **Monthly Requirements:** | Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | |-------|-----|-----|-----|-----|-----|-----|-----| | Units | 400 | 150 | 200 | 150 | 100 | 150 | 250 | --- **Calculations:** **(a) EOQ Technique** - **Monthly Holding Cost:** $2 per month - **Average Monthly Demand:** ??? units - **EOQ:** ??? units - **Total Inventory Held:** ??? units - **Setup Costs:** ???? Calculate: - **Holding Cost:** $??? - **Total Cost:** $??? --- **(b) POQ Technique** - **POQ Interval:** ??? months (round to nearest whole number) - **Total Inventory Held:** ??? units - **Setup Costs:** ??? Calculate: - **Holding Cost:** $??? - **Total Cost:** $??? --- **Analysis:** Compare the total costs from both EOQ and POQ techniques to identify the more cost-effective strategy for Clancy’s Motors. Consider all holding and setup costs, as well as any remaining inventory after month 7.
Transcribed Image Text:**Title:** Inventory Management Techniques: EOQ and POQ **Problem Statement:** Clancy's Motors needs to meet demand for custom-manufactured fuel injector parts. Each item has a holding cost of $2 per month, and each setup costs $80. The lead time is 0 months. **Objective:** Calculate the planned order releases using the following techniques: 1. **Economic Order Quantity (EOQ)** 2. **Periodic Order Quantity (POQ)** Evaluate the costs of each plan, including the holding cost for any inventory left over after month 7. Determine which technique performs better. **Monthly Requirements:** | Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | |-------|-----|-----|-----|-----|-----|-----|-----| | Units | 400 | 150 | 200 | 150 | 100 | 150 | 250 | --- **Calculations:** **(a) EOQ Technique** - **Monthly Holding Cost:** $2 per month - **Average Monthly Demand:** ??? units - **EOQ:** ??? units - **Total Inventory Held:** ??? units - **Setup Costs:** ???? Calculate: - **Holding Cost:** $??? - **Total Cost:** $??? --- **(b) POQ Technique** - **POQ Interval:** ??? months (round to nearest whole number) - **Total Inventory Held:** ??? units - **Setup Costs:** ??? Calculate: - **Holding Cost:** $??? - **Total Cost:** $??? --- **Analysis:** Compare the total costs from both EOQ and POQ techniques to identify the more cost-effective strategy for Clancy’s Motors. Consider all holding and setup costs, as well as any remaining inventory after month 7.
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