The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order. Introduction: In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

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Answer 1

Question

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

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Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 10,908 units per year. JTP purchases these tires from a supplier. The ordering cost is $112 per order and the holding cost is $17.8 per tire per year. The supplier always deliver the shipment within 9 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the average inventory level if JTP uses an order quantity of 1,371 tires?

Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 8,888 units per year. JTP purchases these tires from a supplier. The ordering cost is $124 per order and the holding cost is $19 per tire per year. The supplier always deliver the shipment within 6 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the optimal annual inventory cost for JTP? Use at least 4 decimal places.

Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 10,821 units per year. JTP purchases these tires from a supplier. The ordering cost is $109 per order and the holding cost is $14.6 per tire per year. The supplier always delivers the shipment within 13 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the number of orders per year if JTP uses an order quantity of 1,728 tires? Use at least 4 decimal places.

Answer 2

Question

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

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Answer 3

Question

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

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Answer 4

Question

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

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Answer 5

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

Answer 6

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

Answer 7

Chapter 4.5, Problem 12P

A

Summary Introduction

To calculate: The most ideal amount of imported car mufflers that should be ordered per order and the time gap between each order.

Introduction:In determining the optimal order quantity also known as the economic order quantity, a manufacturing company is able tomaximize its cost efficiency in terms of ordering cost & holding costs. It also helps in effective inventory management to minimize wastage.

Answer 8

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

Answer 9

b

Summary Introduction

To calculate:The re-order point based on the level of on-hand inventory

Introduction:The re-order point is the threshold of stock you identify to make the next order. In light of the same, the re-order point makes sure you have adequate time to restock before it reaches zero. This will make sure of the smooth flow of a company’s production cycle.

Answer 10

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

Answer 11

c

Summary Introduction

To calculate:The additional holding and set-up costs involved if the company is to buy imported car mufflers only once a year.

Introduction:The advantage of placing an order once a year will depend on the many costs relate to the stock ordered. In the said example, the two costs related the order are holding cost and the set up cost, hence the answer is given based on those two cost factors.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4.4 - Prob. 1P Ch. 4.4 - Prob. 2P Ch. 4.4 - Prob. 3P Ch. 4.4 - Prob. 4P Ch. 4.4 - Prob. 5P Ch. 4.4 - Prob. 6P Ch. 4.4 - Prob. 7P Ch. 4.4 - Prob. 8P Ch. 4.4 - Prob. 9P Ch. 4.5 - Prob. 10P

Solution Summary: The author explains how to calculate the optimal order quantity and the time gap between each order.

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