EBK PRINCIPLES OF OPERATIONS MANAGEMENT
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
11th Edition
ISBN: 9780135175644
Author: Munson
Publisher: VST
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 12, Problem 30P

a)

Summary Introduction

To determine: The daily demand of the product.

Introduction: Inventory management is the process of ordering, storing and using inventory of the company such raw material, components and finished goods. It governs the flow of goods from manufacturers to warehouse and to the point of sale. The key function is to maintain record of flow of new or returned products which enters or leaves the company.

a)

Expert Solution
Check Mark

Answer to Problem 30P

The daily demand of the product is 32.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of daily demand of the product:

Dailydemand,d=D250=8,000250=32

The daily demand is calculated by dividing the annual demand, 8000 with the number of working days, 250 which gives the result as 32 units.

Hence, the daily demand is 32 units.

b)

Summary Introduction

To determine: The number of day production must be carried out.

b)

Expert Solution
Check Mark

Answer to Problem 30P

The number of day production must be carried out is 2days.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of number of days in production runs:

Numberofproductiondays=Qp=400200=2

Number of days production must be carried out is calculated by dividing the production quantity, (400) with production rate (200) which gives 2 days.

Hence, the number of day production must be carried out is 2days.

c)

Summary Introduction

To determine: The number production runs per year and annual setup cost.

c)

Expert Solution
Check Mark

Answer to Problem 30P

The number of day production runs per year is 20 and annual setup cost is $2,400.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of number of production runs per year and annual setup cost:

Number of production runs per year:

Numberofproductionrunsperyear=DQ=8,000400=20

Number of production runs per year is calculated by dividing the demand (8000) with production quantity (400) which gives 20.

Annual setup cost:

Annual setup cost=20×$120=$2,400

Annual setup cost is calculated by multiplying number of production runs per year (20) with setup cost (120) which gives $2,400 as annual setup cost.

Hence, the number of production runs per year is 20 and annual setup cost is $2,400.

d)

Summary Introduction

To determine: The maximum and average inventory levels.

d)

Expert Solution
Check Mark

Answer to Problem 30P

The maximum and average inventory levels are 336 and 168 respectively.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of maximum inventory and average inventory level:

Maximum inventory level:

Maximuminventory=Q(1-dp)=400(132200)=336

Maximum inventory is calculated by multiplying production quantity (400) with (132200) which yields 336.

Average inventory level:

Averageinventorylevel=Maximuminventory2=3362=168

Average inventory is calculated by dividing maximum inventory level, 336 by 2 which gives168.

Hence, the maximum and average inventory levels are 336 and 168 respectively.

e)

Summary Introduction

To determine: The total annual setup cost and holding cost.

e)

Expert Solution
Check Mark

Answer to Problem 30P

The total annual setup cost and holding cost is $8,400 and $2400 respectively.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of total annual setup and holding cost:

Totalholdingcost=Averageinventory×holdingcost=168×50=$8400

Total holding cost is calculated by multiplying average inventory (168) with holding cost (50) which yields $8,400.

Totalsetupcost=Numberofproductionrunsperyear×Setupcost=20×120=$2,400

Totalcost=Totalholdingcost+Totalsetupcost=$8400+$2400=$10,800 (1)

Total setup cost is calculated by multiplying number of production runs (20) with setup cost (120) which yields $2,400.

Hence, the total annual setup cost and holding cost is $8,400 and $2400 respectively.

f)

Summary Introduction

To determine: The number of refrigerators to be produced in each production line to minimize the total annual inventory cost and the net saving in inventory.

f)

Expert Solution
Check Mark

Answer to Problem 30P

The number of refrigerators to be produced in each production line to minimize the total annual inventory cost is 37.1 and the net saving in inventory is $1,820.

Explanation of Solution

Given information:

Annualdemand,D=8,000Dailyproductionrate,p=200Setupcost,S=120Holdingcost,H=50

Productionquantity,Q=400Numberofworkingdays=250

Calculation of number of refrigerators produced in each production run:

Q=2DSH(1-dp)=2×8,000×12050(1-32200)=213.81refrigerators

Number of refrigerators produced in each production run is calculated by dividing 2×8,000×120 with 50(1-32200) and taking square root which yields 213.81 refrigerators.

Calculation of holding and setup cost:

Maximum inventory level:

Maximuminventory=Q(1-dp)=213.81(132200)=179.6004

Maximum inventory is calculated by multiplying production quantity (213.81) with (132200) which yields 179.6004.

Average inventory level:

Averageinventorylevel=Maximuminventory2=179.60042=89.8002

Holding cost:

Totalholdingcost=Averageinventory×holdingcost=89.8002×50=$4490

Total holding cost is calculated by multiplying average inventory (89.6002) with holding cost (50) which yields $4,490.

Number of production runs per year:

Numberofproductionrunsperyear=DQ=8,000213.81=37.41

Number of production runs per year is calculated by dividing the demand (8000) with production quantity (213.81) which gives 37.41.

Setup cost:

Totalsetupcost=Numberofproductionrunsperyear×Setupcost=37.42×120=$4,490

Total cost:

Totalcost=Totalholdingcost+Totalsetupcost=$4490+$44900=$8,980 (2)

Total cost is the sum of holding cost and set up cost which is sum of $4,490 and $4,490 which gives $8,980.

Total saving:

Savings=$10,800$8,980=$1,820

Total savings in cost is calculated by taking the difference of $10,800 and $8,980 which gives $1,820.

Hence, the number of refrigerators to be produced in each production line to minimize the total annual inventory cost is 37.1 and the net saving in inventory is $1,820.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Main Challenges at TechInnovateStrategic DirectionTechInnovate's board of directors is pushing for a more aggressive expansion into emerging markets, particularly in Africaand Southeast Asia. However, there's internal disagreement about whether to focus on these new markets or consolidatetheir position in existing ones. Sarah Chen favors rapid expansion, while some senior executives advocate for a morecautious approach.Ethical ConcernsThe company's AI algorithms have come under scrutiny for potential biases, particularly in facial recognition technology.There are concerns that these biases disproportionately affect minority groups. Some employees have voiced ethicalconcerns about selling this technology to law enforcement agencies without addressing these issues.Team Leadership and DiversityTechInnovate's leadership team is predominantly male and Western, despite its global presence. There's growing pressurefrom employees and some board members to diversify the leadership team to…
Sarah Anderson, the Marketing Manager at Exeter Township's Cultural Center, is conducting research on the attendance history for cultural events in the area over the past ten years. The following data has been collected on the number of attendees who registered for events at the cultural center.   Year Number of Attendees 1 700 2 248 3 633 4 458 5 1410 6 1588 7 1629 8 1301 9 1455 10 1989 You have been hired as a consultant to assist in implementing a forecasting system that utilizes various forecasting techniques to predict attendance for Year 11.   a) Calculate the Three-Period Simple Moving Average b) Calculate the Three-Period Weighted Moving Average (weights: 50%, 30%, and 20%; use 50% for the most recent period, 30% for the next most recent, and 20% for the oldest) c) Apply Exponential Smoothing with the smoothing constant alpha = 0.2. d) Perform a Simple Linear Regression analysis and provide the adjusted…
​Ruby-Star Incorporated is considering two different vendors for one of its​ top-selling products which has an average weekly demand of 70 units and is valued at ​$90 per unit. Inbound shipments from vendor 1 will average 390 units with an average lead time​ (including ordering delays and transit​ time) of 4 weeks. Inbound shipments from vendor 2 will average 490 units with an average lead time of 2 weeksweeks. ​Ruby-Star operates 52 weeks per​ year; it carries a 4​-week supply of inventory as safety stock and no anticipation inventory. Part 2 a. The average aggregate inventory value of the product if​ Ruby-Star used vendor 1 exclusively is ​$enter your response here.

Chapter 12 Solutions

EBK PRINCIPLES OF OPERATIONS MANAGEMENT

Ch. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Explain the following: All things being equal, the...Ch. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - When demand is not constant, the reorder point is...Ch. 12 - Prob. 17DQCh. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics it a large manufacturer of...Ch. 12 - Prob. 2PCh. 12 - Jean-Mane Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - William Sevilles computer training school, in...Ch. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - M. P. VanOyen Manufacturing has gone out on bid...Ch. 12 - Chris Sandvig Irrigation, Inc., has summarized the...Ch. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Barbara Flynn is in charge of maintaining hospital...Ch. 12 - Prob. 42PCh. 12 - Authentic Thai rattan chairs (shown in the photo)...Ch. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Gainesville Cigar stocks Cuban agars that have...Ch. 12 - A gourmet coffee shop in downtown San Francisco is...Ch. 12 - Prob. 50PCh. 12 - Prob. 51PCh. 12 - Henrique Correas bakery prepares all its cakes...Ch. 12 - Prob. 53PCh. 12 - Prob. 1CSCh. 12 - Prob. 2CSCh. 12 - Prob. 3CSCh. 12 - Prob. 1.1VCCh. 12 - Prob. 1.2VCCh. 12 - Prob. 1.3VCCh. 12 - Prob. 1.4VCCh. 12 - Prob. 1.5VCCh. 12 - Prob. 1.6VCCh. 12 - Prob. 1.7VCCh. 12 - Prob. 2.1VCCh. 12 - Prob. 2.2VCCh. 12 - Prob. 2.3VCCh. 12 - Prob. 2.4VCCh. 12 - Inventory Control at Wheeled Coach Controlling...Ch. 12 - Prob. 3.2VCCh. 12 - Inventory Control at Wheeled Coach Controlling...
Knowledge Booster
Background pattern image
Operations Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Text book image
MARKETING 2018
Marketing
ISBN:9780357033753
Author:Pride
Publisher:CENGAGE L
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY