Rick Jerz is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is 5,000 units; carrying cost is $50 per unit per year; order costs for his company typically run nearly $30 per order; andlead time averages 10 days. (Assume 250 working days per year.)a) The economic order quantity is 77 units (round your response to the nearest whole number).b) The average inventory isunits (round your response to the nearest whole number).c) The optimal number of orders per year isorders (round your response to the nearest whole number).d) The optimal number of working days between orders isdays (round your response to two decimal places).e) The total annual inventory cost (carrying cost + ordering cost) is $(round your response to two decimal places).f) The reorder point isunits (enter your response as a whole number).

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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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Dalia, the office manager of a desktop publishing outfit, stocks replacement toner cartridges for laser printers. Demand for cartridges is approximately 30 per year and is quite variable (Le., can be represented using the Poisson distribution). Cartridges cost $100 each and require three weeks to obtain from the vendor. Dalia uses a (Q, r) approach to control stock levels (a). If Dalia wants to restrict replenishment orders to twice per year on average, what batch size Q should she use? If she wants to ensure a service level (i.e., probability of having the cartridge in stock when 2 out of 2 needed) of at least 98 percent, what reorder point r should she use? (Hint: Use Table 2.6.(b). If Dalia is willing to increase the number of replenishment orders per year to six, how do Q and r change? Explain the difference in r.
40) PLEASE HELP WITH THIS! Gentle Ben's Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and Is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to arrive. Weekly demand is 100 bottles (closed two weeks per year) with a standard devlation of 30 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability. b. At what inventory level should he place an order? Note: Use Excel's NORM.S.IN( function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number.
A. Determine the order quantity. B. Determine the reorder point.
Fush uses an average of 40 boxes of paper serviettes a day. The restaurant operates 260 days per year, storage and handling costs for the serviettes are $ 30 per year per box, and it costs approximately $60 to order and receive a shipment of serviettes. a. Calculating the order size would minimise the sum of annual ordering and carrying costs? b. compute the total annual costs using your size from part a?
A regional supermarket is open 360 days a year. Daily use of cash register tapes is 15 rolls. The purchase price of the tape is $ 2 and inventory carrying cost is 60 cents per roll a year. Ordering cost is $ 20 per order. The order replenishment lead time is 7 days. What is the Order Point (re-order point) assuming demand is known and constant?
A company stocks an item that is consumed at the rate of 20 units each day. Every time an order is placed for new supply, $ 100 must be paid. A unit inventory held in stock will cost $ 0.15. (a) What is the economic order quantity (EOQ)? (b) What is the cycle time for the EOQ? (c) What is the total cost for the EOQ? (d) What is the total cost if the order quantity is 300 more than EOQ? (e) What is the optimum number of orders (rounded to the closest integer) that the company has to place each year? Assume that the company has a standing policy of not allowing shortages in demand.
EOQ, reorder point, and safety stock Alexis Company uses 937units of a product per year on a continuous basis. The product has a fixed cost of $44 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity.
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
Alpha Products, Inc., is having a problem trying to control inventory. There is insufficient time to devote to all its items equally. The following is a sample of some items stocked, along with the annual usage of each item expressed in dollar volume. ITEM ANNUAL DOLLAR USAGE ITEM ANNUAL DOLLAR USAGE a S 30, 100 k S 1,700 b 27,000 120,000 c 93,000 m 111,000 d 1,400 n 3,000 e 1,800 o 500 f 30,000 p 114, 000 g 1,600 q 2,600 h 2,500 г 28,000 i 3, 200 s 2, 800 j 1,500 t 3, 100 a. Suggest a system for allocating control time? multiple choice ABC analysis Cycle counting b. Specify where each item from the list would be placed.
Petromax Enterprises uses a continuous review inventorycontrol system for one of its SKUs. The following informationis available on the item. The firm operates 50 weeks in a year.Demand = 50,000 units>yearOrdering cost = $35>orderHolding cost = $2>unit>yearAverage lead time = 3 weeksStandard deviation of weekly demand = 125 unitsa. What is the economic order quantity for this item?b. If Petromax wants to provide a 90 percent cycle-servicelevel, what should be the safety stock and the reorder point?
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)?
Sunrise Garden Center buys 425 bags of fertilizer per month for feeding and weeding lawns. The ordering cost is $15.00. Holding cost is $0.10 per bag per year. a. How many bags should Sunrise order at a time? Sunrise should order bags at a time. (Enter your response rounded to the nearest whole number.) b. What is the time between orders? The time between orders is months. (Enter your response rounded to one decimal place.)

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