The economic production quantity (EPQ). Introduction: Economic production quantity (EPQ): The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Question

Want to see the full answer?

Answer 1

Question

100%

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

In addition to the Amazon case study you provided, I'm curious if you've encountered other examples of companies successfully applying Little's Law to enhance their supply chain risk management practices. For instance, have you seen organizations use queuing theory to assess the potential ripple effects of disruptions, stress-test their contingency plans, or identify critical control points that require heightened monitoring and agility? Please provide a reference

Sam's Pet Hotel operates 48 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag The following information is available about these bags: > Demand 85 bags/week >Order cost $60.00/order > Annual holding cost = 35 percent of cost > Desired cycle-service level 80 percent > Lead time = 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 85 bags is incorrect and actual demand averages only 65 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

Osprey Sports stocks everything that a musky fisherman could want in the Great North Woods. A particular musky lure has been very popular with local fishermen as well as those who buy lures on the Internet from Osprey Sports. The cost to place orders with the supplier is $3030/order; the demand averages 55 lures per day, with a standard deviation of 11 lure; and the inventory holding cost is $1.001.00/lure/year. The lead time form the supplier is 1010 days, with a standard deviation of 33 days. It is important to maintain a 9898 percent cycle-service level to properly balance service with inventory holding costs. Osprey Sports is open 350 days a year to allow the owners the opportunity to fish for muskies during the prime season. The owners want to use a continuous review inventory system for this item. Refer to the standard normal table LOADING... for z-values. Part 2 a. What order quantity should be used? enter your response here lures. (Enter your response rounded to the…

Answer 2

Question

100%

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

100%

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

100%

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Question

100%

Answer 6

Question

100%

Answer 7

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Answer 8

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 9

Chapter 12, Problem 18P

a)

Summary Introduction

To calculate: The economic production quantity (EPQ).

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 10

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

Answer 11

b)

Summary Introduction

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

Answer 12

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

Answer 13

c)

Summary Introduction

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

Answer 14

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

Answer 15

d)

Summary Introduction

To determine: The percentage of time the facility will be producing components.

Answer 16

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Answer 17

e)

Summary Introduction

To determine: The annual cost of ordering and holding inventory.

Answer 18

Expert Solution & Answer

Answer 19

Expert Solution & Answer

Answer 20

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 21

Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question 2. With the advent of low-cost...Ch. 12 - Question 3. What is the purpose of the ABC...Ch. 12 - Question 4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question 7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...

Concept explainers

Videos

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

To determine: The percentage of time the facility will be producing components.

To determine: The annual cost of ordering and holding inventory.

Want to see the full answer?

Chapter 12 Solutions

Concept explainers

Videos

To calculate: The number of production runs per year. Introduction: Production runs: The production run is the development of similar or associated goods by utilizing a particular approach or processes.

To calculate: The maximum inventory level. Introduction: Maximum inventory level: The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.

To determine: The percentage of time the facility will be producing components.

To determine: The annual cost of ordering and holding inventory.

Want to see the full answer?

Chapter 12 Solutions

To calculate: The number of production runs per year.

Introduction:

Production runs:

The production run is the development of similar or associated goods by utilizing a particular approach or processes.

To calculate: The maximum inventory level.

Introduction:

Maximum inventory level:

The maximum inventory level is the level of inventory in a firm which should not be exceeded at any circumstances. It is to ensure that the cost of capital is not increased.