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 4P
a)
Summary Introduction
To analyze: The effect on EOQ and total cost due to a 40% increase in demand.
Introduction:
Economic order quantity (EOQ):
EOQ is the quantity of units that must be ordered at a time to an inventory to lessen the total costs of inventory. It is calculated to identify the ideal quantity of units depending on the demand.
b)
Summary Introduction
To analyze: The effect on EOQ and total cost due to a 20% increase in carrying cost.
Introduction:
Economic order quantity (EOQ):
EOQ is the quantity of units that must be ordered at a time to an inventory to lessen the total costs of inventory. It is calculated to identify the ideal quantity of units depending on the demand.
c)
Summary Introduction
To study: The relationship between the lot size and carrying cost.
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A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag.
a. Determine the economic order quantity. (Round your final answer to the nearest whole number.)
Economic order quantity bags
b. What is the average number of bags on hand? (Round your final answer to the nearest whole number.)
Average number of bags
c. How many orders per year will there be? (Round your final answer to the nearest whole number.)
Number of orders per year
d. Compute the total cost of ordering and carrying flour. (Round your final answer to the nearest whole number. Omit the "$" sign in your response.)
Total cost $
e. If annual holding costs were to increase by $9 per bag, how much would that affect the minimum total annual cost? (Round your intermediate calculations to 2 decimal places and final…
Which one of the following represent FIFO method of inventory evaluation?
a.
Old merchandise is sold first
b.
Average number of goods are sold
c.
Old items remain in inventory
d.
New merchandise is sold first
ABC classification divides on-hand inventory into three classes, generally based upon
a. item quantity.
b. unit price.
c. the number of units on hand.
d. annual demand.
e. annual dollar value.
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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- ABC analysis divides on-hand inventory into threeclasses, based on:a) unit price.b) the number of units on hand.c) annual demand.d) annual dollar values.arrow_forward21- Which one of the following represent FIFO method of inventory evaluation? a. Old items remain in inventory b. Old merchandise is sold first c. New merchandise is sold first d. Average number of goods are soldarrow_forwardWhich of the following is the cost of placing an order and receiving goods a) Restoking costs b) Ordering costs c) Carrying costs d) Shortage costsarrow_forward
- Please do not give solution in image format thankuarrow_forwardThe total stockout cost = $ enter your response here. (Enter your response as a whole number.)arrow_forwardCharlie’s Pizza orders all of its pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every four weeks to take orders. Because the orders are shipped directly from Italy, they take three weeks to arrive. Charlie’s Pizza uses an average of 150 pounds of pepperoni each week, with a standard deviation of 30 pounds. Charlie’s prides itself on offering only the best-quality ingre- dients and a high level of service, so it wants to ensure a 98 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 500 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order?arrow_forward
- At a recent manufacturing workshop, XYZ, Incorporated explained that demand for disposable masks increase rapidly in March 2020 when quarantine mandates first took effect. At the time, retailers could only place a single order to cover demands through the end of the summer. A certain retailer purchased disposal masks from a supplier at a cost of $20 per unit and sold them for $30 per unit. By the end of summer, demand for masks subsided considerably and all masks that weren't sold during the summer could be sold at a discounted price of $18 per unit. The retailer estimated that demand between March and August would be Normally distributed with mu = 10,000 and sigma = 1525 units With, supply chains becoming more stable since March 2020, the retailer is currently in the process of establishing a contract with a disposable mask supplier. The supplier has agreed to sell masks to the retailer for $18 per unit and will make deliveries any time the supplier places an order for a cost of $100…arrow_forwardGive typed full explanation If a purchase discount is taken: I. there is a saving in purchase cost. II. ordering costs are reduced. III. carrying costs are increased. IV. there is not necessarily a net saving.arrow_forwardWhich of the following is NOT a type of inventory-related cost? Multiple Choice purchasing costs ordering costs setup costs cost of holding the productsarrow_forward
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