Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated theannual demand for this model at 900 units. His cost to carry one unit is $100 per year per unit, and he has estimated that each ordercosts $25 to place.Using the EOQ model, how many should Ray order each time? (Round your answer to the nearest whole number.)Optimal order quantityunits

The business environment is becoming more competitive, and the business needs to compete with each…

Answered: Ray's Satellite Emporium wishes to…

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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Experience suggests that usage of surgical gloves at a hospital can be approximated by a Normal distribution with a standard deviation of one-half box of surgical gloves per day and a mean of five boxes of surgical gloves per day.If ordering cost is $10 per order, annual holding cost is $10 per box, two days are required to fill an order surgical glove. a) Determine the economic order quantity, (250 workdays a year). b) If the hospital reorders when the surgical gloves on hand and on order is 12 boxes, calculate the risk of a stock-out during a lead time. c) What shortage risk does the hospital incur if it orders 36 boxes when the amount on hand is 12 boxes If a fixed interval of seven days, instead of the EOQ/ ROP model, is used for reordering
Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 5,300 units, the ordering cost is $70 per order, and the annual holding cost rate is 25%. If the cost of the part is $22 per unit, what is the economic order quantity? If required, round your answer to the nearest whole number.Q* = fill in the blank 1 Assume 250 days of operation per year. If the lead time for an order is 13 days, what is the reorder point? If required, round your answer up to the nearest whole number.r = fill in the blank 2 If the lead time for the part is five weeks (25 days), what is the reorder point? If required, round your answer up to the nearest whole number.r = fill in the blank 3 What is the reorder point for part (c) if the reorder point is expressed in terms…
Gentle Ben's Bar and Restaurant uses 7,200 quart bottles of an imported wine each year. The effervescent wine costs $9 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $25 each time an order is placed, and holding costs are 40 percent of the purchase price. It takes six weeks for an order to arrive. Weekly demand is 144 bottles (closed two weeks per year) with a standard deviation of 40 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 99 percent service probability. a. What is the economic quantity for Ben to order? b. At what inventory level should he place an order?
Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set (BB-1 stands for Body Beautiful Number 1). The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year. The stockout cost for BB-1 is estimated to be $50 per set. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1: Demand During Lead Time 40 50 60 70 80 90 The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB-1? The optimal quantity of safety stock which minimizes expected total cost is Probability 0.1 0.2 0.2 0.2 0.2 0.1 sets (enter your response as a whole number).
Palin’s Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). Annual demand 2,750 mufflers Ordering cost $ 35 per order Standard deviation of daily demand 6 mufflers per working day Service probability 76 % Item cost $ 28.00 per muffler Lead time 4 working days Annual holding cost 22 % of item value Working days 275 per year Review period 21 working days a. What is the optimal target level (order-up-to level)? If the service probability requirement is 93 percent, the optimal target level will: Increase Decrease Stay the same
1. Michael Traci, the new inventory manager at Magyar Golf Supplies, is considering using the economic order quantity for controlling inventory. He wants you to apply the EOQ to a sample product, the Super-Z Wedge. The Super-Z Wedge has an average demand of 30 units/period with an ordering cost of $30/order. The cost of carrying a Super-Z Wedge in inventory is $2.00/unit/ period. No safety stock is carried for this item. a. Calculate the economic order quantity. b. Calculate the average cycle stock for this item using the order quantity in question a. c. Assuming there are 12 periods per year, calculate total cost per year.
The Universal Computer Company uses a newly developed A1 chip in the manufacturer of their tablet computers. The estimated annual demand for this chip is 12,000 units. It is estimated that the cost to place an order is $75, and the holding cost for each chip is $20 per year. The company operates 320 days per year. a. What is the economic order quantity for the A1 chip? b. What is the total cost if the Universal Computer Company orders using the EOQ quantity?
A company has a chance to reduce their inventory ordering costs by placing larger quantity orders using the discount schedule below. What should their optimal order quantity be if this company purchases this single inventory item with an e-mail ordering cost of $4, an annual holding cost rate (per unit) of 2% of the price/unit, and an annual demand of 10,000 units? Order quantity (units) Price/unit ($) 0 to 2,499 1.20 2,500 to 3,999 1.00 4,000 or more 0.98
Chicago's Hard Rock Hotel distributes a mean of 900 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 2-day lead time. The hotel expects a 95% service level to satisfy high guest expectations. Refer to the standard normal table for z-values. a) What is the reorder point? b) What is the safety stock? towels (round your response to the nearest whole number). towels (round your response to the nearest whole number). Z 0.38 0.50 0.67 0.84 1.04 1.28 1.41 1.56 1.65 1.75 2.06 2.33 Pr(Z) 65 69 75 80 85 90 92 94 95 96 98 99
Blue Wave corp will need 275,000 units of raw materials next year. The purchase price of the raw materials per unit is 950. The ordering cost for each order is 2,000, while the carrying cost is 30% of the average inventory value. Calculate:a. The most economical order quantity (EOQ)b. How many times should the company order in a year?c. How many days should the company place an order once (1 year = 365 days)?
Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated the annual demand for this model at 1,750 units. His cost to carry one unit is $95 per year per unit, and he has estimated that each order costs $36 to place. Using the EOQ model, how many should Ray order each time? (Round your answer to the nearest whole number.) Optimal order quantity units
the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?

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