The economic production lot size (ELS) should be calculated. Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Sam’s Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about these bags.Demand = 90 bags/weekOrder cost = $54/orderAnnual holding cost = 27 percent of costDesired cycle@service level = 80 percentLead time = 3 weeks 118 working days2Standard deviation of weekly demand = 15 bagsCurrent on-hand inventory is 320 bags, with no open orders or backorders.a. What is the EOQ? What would be the average time between orders (in weeks)?b. What should R be?c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?d. The store currently uses a lot size of 500 bags (i.e., Q = 500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?e. What would be the annual cost saved by shifting from the 500-bag lot size to the…

Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,and uses a continuous review inventory system. It purchaseskitty litter for $10.75 per bag. The following information isavailable about these bags.Demand = 95 bags>weekOrder cost = $58>orderAnnual holding cost = 25 percent of costDesired cycle@service level = 90 percentLead time = 4 weeks 128 working days2Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 315 bags, with no open ordersor backorders.a. What is the EOQ? What would be the average time betweenorders (in weeks)?b. What should R be?c. An inventory withdrawal of 10 bags was just made. Is ittime to reorder?d. The store currently uses a lot size of 490 bags (i.e.,Q = 490). What is the annual holding cost of this policy?Annual ordering cost? Without calculating the EOQ, howcan you conclude from these two calculations that thecurrent lot size is too large?e. What would be the annual cost saved by shifting from the490-bag lot size to the EOQ?

Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,and uses a continuous review inventory system. It purchaseskitty litter for $10.75 per bag. The following information isavailable about these bags.Demand = 95 bags>weekOrder cost = $58>orderAnnual holding cost = 25 percent of costDesired cycle@service level = 90 percentLead time = 4 weeks 128 working days2Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 315 bags, with no open ordersor backorders. a. Suppose that the weekly demand forecast of 95 bags isincorrect and actual demand averages only 65 bags perweek. How much higher will total costs be, owing to thedistorted EOQ caused by this forecast error?b. Suppose that actual demand is 65 bags but that orderingcosts are cut to only $10 by using the Internet to automateorder placing. However, the buyer does not tell anyone,and the EOQ is not adjusted to reflect this reduction in S.How much higher will total costs be, compared to whatthey could be if…

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Question

Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Expert Solution & Answer

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Answer 3

Question

Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Answer 4

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Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Answer 5

Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Answer 6

Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Answer 7

Chapter C, Problem 3P

Summary Introduction

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Answer 8

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Ch. C - Bold Vision, Inc., makes laser printer and...Ch. C - Prob. 2P Ch. C - Prob. 3P Ch. C - One-Eyed Toad Pottery makes custom planters for...Ch. C - Prob. 5P Ch. C - To boost sales, Pfisher (refer to Solved Problem...Ch. C - Prob. 7P Ch. C - Prob. 8P Ch. C - Prob. 9P Ch. C - Prob. 10P

The economic production lot size (ELS) should be calculated. Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Solution Summary: The author explains that the economic production lot size (ELS) should be calculated. It is the quantity produced at lowest stock value.

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Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Chapter C Solutions

The economic production lot size (ELS) should be calculated. Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

Solution Summary: The author explains that the economic production lot size (ELS) should be calculated. It is the quantity produced at lowest stock value.

Concept explainers

Videos

Interpretation: The economic production lot size (ELS) should be calculated. Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.

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Chapter C Solutions

Interpretation: The economic production lot size (ELS) should be calculated.

Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.