The order quantity that should be used in a continuous review inventory system is to be calculated. Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

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Answer 1

Question

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

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Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 36 units per day Average lead time = 50 days Item unit cost = $70 for orders of less than 400 units Item unit cost = $68 for orders of 400 units or more Ordering cost = $45 Inventory carrying cost = 25% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time. Calculate EOQ if unit cost is $70 and $68. (Note: These EOQs do not need to be feasible in theirprice range.) (Round up your answers to the next whole number.) EOQ Unit cost at $70 units Unit cost at $68 units Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Annual Ordering Cost Unit cost at $70 Unit…

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?

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 $30/order; the demand averages 3 lures per day, with a standard deviation of 1 lure; and the inventory holding cost is $1.00/lure/year. The lead time form the supplier is 9 days, with a standard deviation of 3 days. It is important to maintain a 97 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 for z-values. 1. What order quantity should be used? 2. What reorder point should be used ? 3. What is the total annual cost of this inventory system?

Answer 2

Question

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Answer 6

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Answer 7

Chapter 9, Problem 22P

A

Summary Introduction

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Answer 8

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

Answer 9

B

Summary Introduction

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

Answer 10

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Answer 11

C

Summary Introduction

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

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The order quantity that should be used in a continuous review inventory system is to be calculated. Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Solution Summary: The author explains that economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Concept explainers

Videos

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.

Want to see the full answer?

Chapter 9 Solutions

The order quantity that should be used in a continuous review inventory system is to be calculated. Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Solution Summary: The author explains that economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Concept explainers

Videos

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated. Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Interpretation: The reorder point that should be used is to be calculated. Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

Interpretation: The total number of cost for this inventory system is to be calculated. Concept Introduction: Annual holding cost is the stock holding cost per annum.

Want to see the full answer?

Chapter 9 Solutions

Interpretation: The order quantity that should be used in a continuous review inventory system is to be calculated.

Concept Introduction: Economic order quantity (EOQ) is the order of quantity that decreases the total holding cost and ordering costs for the annum.

Interpretation: The reorder point that should be used is to be calculated.

Concept Introduction: Reorder point assures that there should be a balance in stock. It avoids unnecessary carrying cost of the stock.

Interpretation: The total number of cost for this inventory system is to be calculated.

Concept Introduction: Annual holding cost is the stock holding cost per annum.