The annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carrying cost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. Calculate the Economic Order Quantity calculate the reorder point calculate the average inventory Suppose orders are placed only at review time. calculate the optimal period and the optimal order quantity.

The annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carrying cost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. Calculate the Economic Order Quantity calculate the reorder point calculate the average inventory Suppose orders are placed only at review time. calculate the optimal period and the optimal order quantity.

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...

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The annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carryingcost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month.Determine the Economic Order Quantity. Determine the reorder point .Determine the average inventory .Suppose orders are placed only at review time. Find the optimal period and the optimal order quantity.
Petromax Enterprises uses a continuous review inventorycontrol system for one of its SKUs. The following informationis available on the item. The firm operates 50 weeks in a year.Demand = 50,000 units>yearOrdering cost = $35>orderHolding cost = $2>unit>yearAverage lead time = 3 weeksStandard deviation of weekly demand = 125 unitsa. What is the economic order quantity for this item?b. If Petromax wants to provide a 90 percent cycle-servicelevel, what should be the safety stock and the reorder point?
Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost $ 8.00 Standard deviation of weekly demand 25 per week Order cost $ 298.00 Lead time 4 weeks Annual holding cost (%) 29 % of item cost Service probability 98 % Annual demand 28,100 Average demand 562 per week a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal order quantity units Reorder point units b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.) Holding cost $ Ordering cost $ c. Assume a price break of $50 per order was offered for purchase quantities of 2,100 or more units per order. If…
AaBbCc AaBbCc AaBbCc No Spacing Normal Reuse Heading 1 Replace Files Paragraph Styles Editing Reuse Files Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation of 12. If Hinsdale cannot have stockouts in more than 10% of the time in any order, how much safety stock should be maintained and at what reorder point? 1. SKU F5402: daily demand is normally distributed with a mean of 16, standard deviation of 4, lead time is 4 days, and must operate at a 95% service level. 2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally with a mean of 6 days and standard deviation of 2 days, and must operate at a 95% service level. 3. SKU F9004: daily demand is normally distributed with a mean of 21 units and a standard deviation of 3 days. The lead time is also normally distributed with a mean of 4 days, standard deviation of 2 days, and a service level of 90% is required. dictions: On acer %24 4. % &…
A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 20 cans per day. Inventory holding costs are $0.50 per can per year. Ordering costs are $10 per order. The lead time is two weeks. Backorders are not practical— the motorist drives away.a. Based on these data, choose the appropriate inventory model and calculate the economic order quantity and reorder point. Describe in a sentence how the plan would work. Hint: Assume demand is deterministic.b. The boss is concerned about this model because the demand really varies. The standarddeviation of demand was determined from a data sample to be 6.15 cans per day. Themanager wants a 99.5 percent service probability. Determine a new inventory planbased on this information and the data in part (a). Use Qopt from part (a).
The following information relates to the forthcoming period:-Order costs = $25per orderHolding costs = 17% of purchase priceAnnual demand = 16,000 unitsPurchase price = $17 per unitOrder quantity = 650 unitsRequired:-What are the total annual costs of inventory?
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.
The annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carrying cost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month.1 Determine the Economic Order Quantity 2 Determine the reorder point 3 Determine the average inventory 4 Suppose orders are placed only at review time. Find the optimal period and the optimal order quantity.
The annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carryingcost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. Suppose orders are placed only at review time. Find the optimal period and the optimal order quantity.
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?
the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?
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