ABC Company is planning to stock its product which is classified as an inventory item. The company has developed the following information: Annual usage is 16,200 units, cost of the inventory per unit is P730; ordering cost is P220 per order; carrying cost is 28% of inventory value per year. Determine the optimum number of units per order.

ABC Company is planning to stock its product which is classified as an inventory item. The company has developed the following information: Annual usage is 16,200 units, cost of the inventory per unit is P730; ordering cost is P220 per order; carrying cost is 28% of inventory value per year. Determine the optimum number of units per order.

Name: ABC Company is planning to stock its product which is classified as an
Uploaded: 2024-03-20T06:57:05.000Z
Channel: Bartleby
Description: ABC Company is planning to stock its product which is classified as an inventory item. The company has developed the following information: Annual usage is 16,200 units, cost of the inventory per unit is P730; ordering cost is P220 per order; carry

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

See similar textbooks

Similar questions

The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
Catlea Merchandising is engaged in selling school shoesfor both boys and girls in their teenage years. Catlea needs 32,000 pairs of shoes in a year in order to satisfy the market demand. It costs ₱ 48 to place an order while ₱ 8 is needed to hold each quantity of shoe in Catlea's inventory. Upon checking on Catlea's supplier, it takes 8 days in between placing an order and eventually receiving it. a. Determine the Economic Order Quantityb. Determine the number of order per monthc. Determine the reorder point
For a specific farm implement ‘FI’ is to be ordered by a food processing company, following data is available: Monthly Demand= 800 units Purchase cost/unit = $40/unit Ordering costs= $60/ order Holding costs (Ch) = $12/unit/year, fire insurance = 6% of the unit cost, 2% other overheads. Determine optimal order quantity of ‘FI’ items and how frequently the order should be placed?
1. Calculate Economic Order Quantity (EOQ), number of orders, annual ordering costs, annual carrying costs and total inventory costs from the following: Annual consumption: 6000 units ; Cost of placing one Order: RO 60 Carrying cost per unit: RO 22. Find out the EOQ, Annual ordering cost and annual holding cost from the following information. The demand is 19500 units per year, holding cost is RO 4 per unit for a year and ordering cost is RO 25 order. 3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units.
Based on the records of ABC company, the annual demand for item HP26 has annual demand of 6,582 units. The ordering cost per order is PhP105, and the holding per unit per year cost is PhP136. a. What is the Economic order quantity?b. What is number of times the company will order?c. What is the annual carrying cost?d. What is the annual ordering cost?e. What is the total inventory costs incurred at EOQ?
A company has an annual demand for a specific item of 12,000 units. The carrying cost per unit per year is R.50, and the cost to place an order is R80. Calculate the Economic Order Quantity (EOQ) and also explain the following related terms • Re-order Level, • Ordering Point, • and Minimum Level.
Maira Hijab Enterprise (MHE) is a supplier that sells Exclusive Embroidery Silk Hijabs to boutique and online resellers. The annual demand is approximately 360 hijabs. MHE pays RM50 for each hijab and estimates that the annual holding cost is 2 percent of the hijab's value. It costs approximately RM100 to place an order (managerial and clerical costs). Required: Determine the economic order quantity (EOQ) (Round up your answers to the nearest figure). а. b. Assuming a 300-day work year, how many orders should be processed per year and what is the expected time between orders? С. Calculate the total cost for the order. d. After several months of the introduction of the Exclusive Hijab, MHE decides to all costs related to their product due to the increment of hijab’s costs by the supplier. MHE currently orders 1000 hijabs per month. The new information as regards to the Exclusive Hijab is as follows: i. The ordering cost for these is RM100 per order and ii. The carrying cost is assumed…
The company Marombeiro is a commercial representative of a food supplement widely consumed in gyms. The average daily demand for the product is 1,500 units and a standard deviation of 300 units. Average shipping time is 5 days. Of course, if the order is placed at the end of the week, it may take a little longer to receive the shipment, so the standard deviation of the delivery time is 2 days. The unit has a value of R$ 50.00 per unit in stock, an order cost of R$ 50.00 and an annual maintenance fee of 20%. Assume the service level is 99.5%. How much safety stock should the company have? ( )7,500 units ( )19,350 units ( )3,074 units ( )7,916 units
The company Marombeiro is a commercial representative of a food supplement widely consumed in gyms. The average daily demand for the product is 1,500 units and a standard deviation of 300 units. Average shipping time is 5 days. Of course, if the order is placed at the end of the week, it may take a little longer to receive the shipment, so the standard deviation of the delivery time is 2 days. The unit has a value of R$ 50.00 per unit in stock, an order cost of R$ 50.00 and an annual maintenance fee of 20%. Suppose the company Marombeiro wants to have a Service Level of 97%. What would be the safety stock that would guarantee this level of service? ( )3,460 units ( )7,930 units ( )5,768 units ( )4,826 units
Question 1 For supply item ABC, Andrews Company has been ordering 400 units per week. A new purchasing agent has been hired by the company who wants to start using the economic-order- quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Lead time, in days Ordering costs Insurance and handling costs Purchase price per unit Return on cash investment 20,800 5 $22 $7 $15 15% Required
explain the characteristics of inventory situations: 1. lead time 2. sources and level of risk 3. Static versus dynamic problems
Happy Pet, Inc., is a large pet store located in LongBeach Mall. Although the store specializes in dogs, it a lso sellsfish, turtle, and bird supplies. The Everlast Leader, a leather leadfor dogs, costs Happy Pet $7 each. There is an annual demand for6,000 Everlast Leaders. The manager, Stephan Wagner, has determinedthat the ordering cost is $20 per order and the carrying cost,as a percentage of unit cost, is 15%. Happy Pet is now consideringa new supplier of Everlast Leaders. Each lead would cost only$6.65, but, in order to get this discount, Happy Pet would have tobuy shipments of 3,000 at a time. Should Happy Pet use the newsupplier and take this discount for quantity buying?