Problem 10-09 (Algorithmic)Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 5,500 units, the ordering cost is $80 per order, and the annual holding cost rate is 22%. If the cost of the part is $16 per unit, what is the economic order quantity? If required, round your answer to the nearest whole number.Q* = fill in the blank 1Assume 250 days of operation per year. If the lead time for an order is 12 days, what is the reorder point? If required, round your answer up to the nearest whole number.r = fill in the blank 2If the lead time for the part is five weeks (25 days), what is the reorder point? If required, round your answer up to the nearest whole number.r = fill in the blank 3What is the reorder point for part (c) if the reorder point is expressed in terms of the inventory on hand rather than the inventory position? If required, round your answer up to the nearest whole number.On hand reorder point will be fill in the blank 4.

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Answered: Cress Electronic Products manufactures…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 17E

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Problem 10-09 (Algorithmic)

Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 5,500 units, the ordering cost is $80 per order, and the annual holding cost rate is 22%.

If the cost of the part is $16 per unit, what is the economic order quantity? If required, round your answer to the nearest whole number.

Q^* = fill in the blank 1
Assume 250 days of operation per year. If the lead time for an order is 12 days, what is the reorder point? If required, round your answer up to the nearest whole number.

r = fill in the blank 2
If the lead time for the part is five weeks (25 days), what is the reorder point? If required, round your answer up to the nearest whole number.

r = fill in the blank 3
What is the reorder point for part (c) if the reorder point is expressed in terms of the inventory on hand rather than the inventory position? If required, round your answer up to the nearest whole number.

On hand reorder point will be fill in the blank 4.