Tyler decided to open a bakery because everyone he knew told him that his baked goodswere "out of this world." He had a little bit of a business school background because he gothis Bachelor's from SPS at UIW recently. He remembered his teacher telling him thatinventory models can be used for both the raw materials as well as the finished products for abusiness like his. So, he decided to see if he could use the basic EOQ model for identifyinghow much quantity to order of raw materials such as eggs, flour, sugar, etc. To get started, hedecided to create a model for flour based on the information he had on hand regardingpotential costs as follows:Usage per month 100 IbsPurchase cost $1 per Ib.Order cost $10.00 per order sentAnnual Holding Rate 10% of purchase price per Ib.• 52-week year 300 working days per year• Lead time 2 daysFill in the following table based on this information:Optimal Inventory PolicyAnswer Type7Reorder Point rIbs.8Number of Orders Per Year (D/Q*)9Cycle Time (Days) Tdays%23

Annual demand, d= 12×100 =1200 lbs Purchase cost= $1 Ordering cost, o=$10 Holding…

Answered: Tyler decided to open a bakery because…

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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eBook Problem 8-25 (Algorithmic) Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company decided to contract with three smaller cabinetmakers to do the final finishing operation. For the three cabinetmakers, the number of hours required to complete all the oak cabinets, the number of hours required to complete all the cherry cabinets, the number of hours available for the final finishing operation, and the cost per hour to perform the work are shown here: 1 Hours required to complete all the oak cabinets Hours required to complete all the cherry cabinets Hours available Cost per hour C₁ Cabinetmaker 1 Cabinetmaker 2 Cabinetmaker 3 50 61 35 $36 proportion of Oak cabinets assigned to cabinetmaker 1 proportion of Oak cabinets assigned to cabinetmaker 2 proportion of Oak cabinets assigned to cabinetmaker 3 proportion of Cherry cabinets assigned to cabinetmaker 1 C2…
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)?
Please solve and explain how you found the answer
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 10 boxes per weekStore open 48 weeks/yearOrder cost = $40/orderLead-time = 4 weeksItem cost = $80/boxStd. deviation in weekly demand = 6Inventory holding cost = 15% per yearService level = 90% Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 55 units on-hand. There were no scheduled receipts, and 25 units…
Tyler decided to open a bakery because everyone he knew told him that his baked goods were “out of this world.” He had a little bit of a business school background because he got his Bachelor’s from SPS at UIW recently. He remembered his teacher telling him that inventory models can be used for both the raw materials as well as the finished products for a business like his. So, he decided to see if he could use the basic EOQ model for identifying how much quantity to order of raw materials such as eggs, flour, sugar, etc. To get started, he decided to create a model for flour based on the information he had on hand regarding potential costs as follows: Usage per month 100 lbs Purchase cost $1 per lb. Order cost $10.00 per order sent Annual Holding Rate 10% of purchase price per lb. 52-week year 300 working days per year Lead time 2 days Write a sentence explaining how Tyler should plan on ordering the flour for his bakery: how much to order and when to order (from the first…
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28 ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following datar Demand - 7 boxes per week Store open - 48 weeks/year Order cost - 575/order Lead-time4 weeks them cost - $150/box Std. deviation in weekly demand - 7 Inventory holding cost - 10 percent per year Service level - 91 percent Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU, AM the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 85 units on-hand. There were no scheduled receipts…
For a particular SKU, the lead time is 4 weeks, the average demand is 150 units perweek, and safety stock is 100 units. What is the average inventory if 1600 units areordered at one time? What is the order point?
Suppose you have been employed by Kam Steels Corporation as a financial manager. You want to change old inventory ordering system to the just-in-time inventory method. The shareholders and the CEO of the firm would like to know how the new would operate and the benefits and disadvantages of the just-in-time inventory method. By providing a high-quality argument, please explain how the new would operate and its benefits and disadvantages to the shareholders and the CEO of the firm.
Kaniri Global Imports (a retail store) sells artisan greeting cards. The owners search for localartists from around the world from whom to buy their greeting card inventory. The followinginformation is available to you for this problem:Demand/Sales = 110 cases of cards per yearOrdering or Setup Cost = $25 per orderCarrying Charge = 18% per yearUnit Cost = $150 per caseAnswer the following questions and be sure to show your computations. You can use whateversymbol you need for square root, if typing in Word.1. How many cases should be ordered at a time? (This number will be the EOQ). Computeto two decimal places. In reality they would round, but for this problem keep the twodecimal places.2. How many times should Kaniri order in a year? Do not answer in terms of how manydays or months, but rather how many times per year. Round your answer up to the nexthighest whole number.3. Answer all three:a. What is the annual cost of ordering the cards?b. What is the annual cost of carrying the…

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