OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9781259326738
Author: SCHROEDER
Publisher: MCG
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Chapter 14, Problem 10P
The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs $25 each. The carrying charge is 30 percent per year, and the ordering cost is $15 per order.
- a. What is the EOQ for this item?
- b. How often will the dealer reorder this part?
- c. What is the annual cost of ordering and carrying this part?
10. The Toyota dealer from problem 3 is considering insta1ling either a Q or a P system for inventory control. The standard deviation of demand has been 4 units per month, and the replenishment lead time is two months. A 95 percent service level is desired.
- a. If a continuous review system is used, what is the value of Q and R that should be used?
- b. If a periodic review system is used, what is the value of P and T that would be applicable?
- c. What are the pros and cons of using the P system compared with using the Q system for this part?
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The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs $25 each. Thecarrying charge is 30 percent per year, and the ordering cost is $15 per order.a. What is the EOQ for this item?b. How often will the dealer reorder this part?c. What is the annual cost of ordering and carrying this part?
PM CTC is engaged in selling shoes for the military. Upon checking on PM CTC’s supplier, it takes 8 days in between placing an order and eventually receiving it. On the average, they sell 2000 pairs of shoes per day.
Determine PM CTC’s reorder point.
Le Pearl sells 4500 readymade dresses for the children. The cost to place an order of readymade dress is RO 22. The cost of a readymade is RO 20 per unit and the carrying cost is 11% of the cost. Find the Economic Order Quantity.
Chapter 14 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 14.S - eXcel Suppose that for problem 1 in the chapter,...Ch. 14.S - Prob. 2PCh. 14.S - For problem 2 in the chapter, suppose the Grinell...Ch. 14.S - A producer of electronic parts wants to take...Ch. 14 - Identify the different types of inventories (raw...Ch. 14 - Why are stockout costs difficult to determine?...Ch. 14 - What is the difference between a requirements...Ch. 14 - Compare and contrast the management of finished...Ch. 14 - For a given service level, why does a P system...Ch. 14 - Under what circumstances might CPFR be useful, and...
Ch. 14 - Prob. 7DQCh. 14 - What is the appropriate role of inventory turnover...Ch. 14 - Suppose you are managing a chain of retail...Ch. 14 - The Always Fresh Grocery Store carries a...Ch. 14 - The Grinell Machine Shop makes a line of metal...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - Prob. 4PCh. 14 - The famous Widget Company sells widgets at the...Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - An electronics retailer carries a particular...Ch. 14 - An electronics retailer carries a particular...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - eXcel 13. The Cover-up Drapery Company carries...Ch. 14 - Suppose you are the supplier of the Cover-up...
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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
- Peach Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 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. Show Computations and Explanations. The EOQ = 200 Units The Average Level of Inventory = 121.92 Units The Reorder Point = 33 Units A. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Reorder Point (Format: Change or Do not Change) B. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Economic Order Quantity (Format: Change or Do not Change)arrow_forwardLead time for some SKU is always 10 days, and demand for that SKU is always 50 per day. What isthe reorder point for this SKU?arrow_forwardsniparrow_forward
- #14 Can you show me how to do this?arrow_forwardNelson’s Hardware Store stocks a 19.2 volt cordless drill that is a popular seller. Annual demand is 5,000 units, the ordering cost is $15, and the inventory holding cost is $4/unit/year.a. What is the economic order quantity?b. What is the total annual cost for this inventory item?arrow_forwardMaroons Medical Supplies, Inc. must order masks from its supplier in lots of 1 dozen boxes. Given the information provided below, complete the following table: Annual demand 26,000 dozen Cost per order placed P30 Carrying cost 20% Price per dozen P7.80 Order Size (Dozen) 250 500 1,000 2,000 13,000 26,000 Number of orders Average inventory Carrying cost Order cost Total cost 1. What is the EOQ? Please include/fill the table and solve for EOQ. Thank you so much!arrow_forward
- Economic Order QuantityA pipe manufacturer requires a chemical for making plastic at the rate of 6000gallons per year. The cost of keeping the chemical storage is $10 per gallon peryear. Ordering costs are $200 per order. The chemical is bought at $45 pergallon.What is the EOQ and the Annual Total Cost?arrow_forwardWhen cycle counting inventory, why do experts recommend a lower acceptable error tolerance for A items than B or C items?arrow_forwardEnergyzer , a regional electronics retailer , estimates that sells 13 , 000 4-packs of batteries per year (or 250 per week). Each 4-pack of batteries costs the retailer $2.00; with a carrying cost rate of 32%; and ordering costs of $40.00 per order. a. Calculate the optimum order period—in terms of weeks , b. Calculate the economic order quantity PLEASE SHOW WORKarrow_forward
- (c) A company which produces washing machines has to store a certain item, and two such items are needed to assemble one washing machine. Annual demand for machines is 1000 units. The following information is available. Ordering cost = Rs.250 per order Inventory holding cost = Rs.125 per unit per year Back-order cost = Rs.150 per unit per year Find the following. i) Economic order quantity ii) Optimum level of shortagearrow_forwardCoffee Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 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. Show Computations and Explanations. The EOQ = 200 Units The Average Level of Inventory = 92 Units The Reorder Point = 33 Units A. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Ordering Cost (Format: Change or Do not Change) B. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Carrying Cost (Format: Change or Do not Change) C. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Total Inventory Cost (Format: Change or Do not Change)arrow_forwardUse ABC analysis to determine the items deserving mostattention and tightest inventory controlarrow_forward
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