The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is$64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventorycarrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005is used.What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005?OA. $2050O B. $1360O C. $1697O D. $825O E. $1200

Economic order quantity is the optimal quantity that the business needs to buy the inventory to…

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Practical Management Science

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Author:WINSTON, Wayne L.

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The demand for a particular part called SKU 005 is 1,200 units a year. The cost of one SKU 005 is $40.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days to deliver that order. What should the purchasing manager's reorder point be? O A. 24 O B. 36 O C. 30 O D. 5 O E. 12
6000 units of a part are needed every year. Currently, this part is manufactured internally. Each production run costs 500 dollars to set up. The part costs 5 dollars. The carrying cost is 10% per year. The company has the option of ordering this part from another company. This would increase the part’s cost to 6 dollars, although the fixed cost of ordering would be low at 300 dollars per order. Should the company continue manufacturing the part, or order it? Show your calculations.
Abey Kuruvilla, of Parkside Plumbing, uses 1,200 of a certain spare part that costs $25 for each order, with an annual holding cost of $25 a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimal places). Total Cost (S) Order Size 25 40 50 60 100
Popular Company places 10 orders per year with its supplier. Each order is for an amount exactly equal to the EOQ. Popular’s order cost has been determined to be $50 per order. Popular carries no safety stock at all. What is Popular’s order cost per order?
Wang Distributors has an annual demand for an airport metal detector of 1,421 units. The regular cost of a detector for Wang is $363. The storage cost is estimated to be 20% of the unit cost, and the cost of placing each order is $25. If Mr. Wang, the owner, orders quantities of 300 or more, the cost of one detector will be $365. Wang Distributors has a year of 250 business days. When a new order of detectors is made, the supplier takes 3 days to deliver it. Show your work. 1. What inventory management model should we use to solve this problem? Model Economic Quantity to Produce Model Economic Quantity to Order Model to handle dependent demand Model for discount purchases 2. What is the optimal quantity of detectors that should be made in each order if purchased at full price? Response 3. What is the optimal quantity of detectors that should be made in each order if purchased at a discount price? Response 4. After validating the quantity of detectors that should be made in each order…
A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUs. Following are the characteristics of one item. Demand (D) = 64 units/week (Assume 52 weeks per year), Ordering or setup cost (S) = $50/order, Holding cost (H) = $13/unit/year, Lead time (L) = 2 weeks, Standard deviation of weekly demand = 12 units, Cycle-service level = 88 percenta. What is the EOQ for this item? b. What is the desired safety stock? c. What is the reorder point? d. What are the cost implications if the current policy for this item is Q 200 and R 180?
An integrated circuit manufacturer’s annual cost of holding inventory is 48 percent.What inventory holding cost (in $) does it incur for an item that costs $300 and has aone-month supply of inventory on average?
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 48,400 units per year, an ordering cost of $3 per order, and carrying costs of $1.50 per unit. a. What is the economic ordering quantity? _____________Units b. How many orders will be placed during the year? _____________Orders c. What will the average inventory be? ____________Units d. What is the total cost of ordering and carrying inventory? $__________
Part Number Part Unit Value in $ Quantity currently in inventory Average annual usage 1234 2.5 3000 1235 0.2 900 1236 15 1000 1237 0.75 7900 1238 7.6 2800 1239 4.4 5000 1240 1.8 1800 1241 0.05 1200 1242 17.2 2000 1243 2500 1244 7000 300 550 400 50 180 20 200 10 950 160 430 9 3.2 given following table, perform ABC classification
Is proper cost of storage is necessary? 1-True 2-False
Romulo Drugstore sells 10 bottles of Paracetamol syrup Strawberry flavor 60 mL a day, and 15 bottles on holidays and weekends. It takes 5 days for the supplier to deliver the order; and on peak seasons and certain occasions, the supplier takes 10 days to deliver the ordered items. What should be the safety stock level of the said item? 20 bottles 25 bottles 100 bottles 175 bottles
EE Co has calculated the following in relation to its inventories.Buffer inventory level 60 unitsReorder size 250 itemsFixed order costs $40 per orderCost of holding onto one item pa $1.5 per yearAnnual demand 10,000 itemsPurchase price $2 per itemWhat is the total inventory related costs for a year (to the nearest whole $)?

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What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005? O A. $2050 O B. $1360 C. $1697 D. $825 E. $1200