20. Refer to Figure 1. If Brown's lead time is four working days, the average rate of usage is 40 bags per day, and the company carries a safety stock of 20 bags, the reorder point would be a. 180 bags. b. 140 bags. c. 160 bags. d. 100 bags.
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- Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the carrying cost for one pound of oats is 0.45. Required: 1. Compute the economic order quantity for oats. 2. Compute the carrying and ordering costs for the EOQ.3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a cost of P135. Annual carrying costs are P 630 per bag. The bakery operates 280 days per year. Lead time = 2 weeks. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. When should the bakery order for more sugar? d. How many times per year will the bakery order for sugar?A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how much is delivered) and $1.20 per gallon. The annual holding cost is 35% of the price per gallon. Usage is 250 gallons/week. a) If the order quantity is 1000 gallons, what is the average inventory? b) If the order quantity is 1500 gallons, how many orders are placed each year? c) What is the EOQ quantity? d) If the order quantity is 2500 gallons, what is the sum of the ordering and holding costs PER GALLON? e) If orders are for the EOQ amount, what is the annual cost of the inventory system as a percentage of the annual purchase cost? f)If orders must be in integer multiples of 1000 gallons, how much should be ordered to minimize ordering and holding costs PER GALLON? g) A 3% purchase price discount is given if orders are for 8000 gallons or more. What would total annual costs (purchasing, ordering, and holding) be using this discount?
- Q.3.1 Gill Enterprises produces a number of consumer items, including a stove. A key component of the stove is purchased from an outside supplier. In total, the company purchases 2 500 components each year. It costs approximately R12 to place an order and it costs R0.25 to carry one part in inventory for a year. The company is operational for 50 weeks in a year. Required: Q.3.1.2 It takes about four weeks to receive an order of parts from the supplier. The company normally uses 52 parts each week in production. However, usage can be as high as 70 parts per week. Calculate the safety stock. Calculate the reorder point with safety stock included.(i) Electronics Ltd manufactures air conditioners. It purchases 200,000 units of a particular type of compressor part, CU30, each year at a cost of $64 per unit. Annual carrying cost (for insurance, material handling, breakage etc) per unit is 5% of the unit purchase price. Currently Electronics Ltd places 50 orders for 4,000 units each year and ordering costs per purchase order are $18. d) Calculate the EOQ.e) What is the minimum ordering cost?f) What is the minimum storage cost?Macagba Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year. It costs $150 for each order of the chemical. Macagba uses the item at a constant rate each year. Calculate the Economic Order Quantity. 40.62 Use the data from above and assume that Macagba Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Macagba desires to keep a safety stock of 4 units. Calculate the reorder point.
- (i) Electronics Ltd manufactures air conditioners. It purchases 200,000 units of a particular type of compressor part, CU30, each year at a cost of $64 per unit. Annual carrying cost (for insurance, material handling, breakage etc) per unit is 5% of the unit purchase price. Currently Electronics Ltd places 50 orders for 4,000 units each year and ordering costs per purchase order are $18. a) Calculate the current annual ordering cost.b) Calculate the current annual carrying cost.c) What is the current total stock administration cost?d) Calculate the EOQ.e) What is the minimum ordering cost?f) What is the minimum storage cost?g) What is the minimum total stock administration cost?h) How much savings would Electronics Ltd. make using the EOQ policy, rather than the current policy of purchasing 4,000 units per order. (ii) Maximum usage for Electronics Ltd. for any one week is 1,000 units and the minimum usage 400 units. Suppliers take anywhere from 2 to 4 weeks to deliver supplies after…The economic order quantity of Lancer Inc. is 1,000 unit. They sold their sole product for a selling price of P5. It takes P20,000 a year for Lancer Inc. in ordering 1,000 units per transaction. Carrying cost is P4 per unit per year. The lead time for this product is one week. 1. How much sales revenue should Lancer Inc. have for this economic order quantity to be plausible? (Use 360 days a year)A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a cost of $135. Annual carrying costs are $630 per bag. The bakery operates 280 days per year. Lead time = 2 weeks. Determine the economic order quantity. What is the average number of bags on hand? When should the bakery order for more sugar? How many times per year will the bakery order for sugar?
- The Metropolitan Book Company purchases paper from the Atlantic Paper Company. Metropolitan produces magazines and paperbacks that require 1,215,000 pounds of paper per year. The cost per order for the company is $1,200; the cost of holding 1 pound of paper in inventory is $0.08 per year. Determine the following. The economic order quantity The minimum total annual cost The optimal number of orders per year The optimal time between orders.Scouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories, insurance, storage, taxes and other cost are incurred amounted to P2 per unit per year. Every time Scouts Corp. makes an order, P10 is incurred. On the average it takes 3 days to make and receive an order. (Use 360 days a year). How much transaction or ordering cost are incurred each year? How much is the annual cost of inventory?8.. If the cost to place one order increased by P 10 and the cost to carry one Material A in stock remains the same, the economic order quantity will be 600 units а. b. 447 units с. 425 units d. 500 units