Demand for an item is 3650 units per year. Each unit costs $20 and each order placed costs $10. Annual inventory holding costs are 10% of the item cost. You are using a fixed order quantity method, and assume all the assumptions needed for EOQ are met. The lead time is 2 days. At what level of inventory (R) should you place your next order? 20 10 3650 191

Demand for an item is 3650 units per year. Each unit costs $20 and each order placed costs $10. Annual inventory holding costs are 10% of the item cost. You are using a fixed order quantity method, and assume all the assumptions needed for EOQ are met. The lead time is 2 days. At what level of inventory (R) should you place your next order? 20 10 3650 191

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 chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
Demand for a popular athletic shoe is nearly constant at 1600 pairs per week for a regional division of a national retailer. The cost per pair is $64. It costs $75 to place an order, and annual holding costs are charged at 25% of the cost per unit. The lead time is 3 weeks. One year has 52 weeks.a. What is the Economic Order Quantity?b. What is the reorder point?c. What is the cycle time?d. What is the total annual cost?
Demand for a popular athletic shoe is nearly constant at 1000 pairs per year for a regional division of a national retailer (open every day, working days=365). The cost per pair is $54. It costs $72 to place an order, and annual holding costs are charged at 22% of the cost per unit. The lead time is two weeks (14 days). Show steps to find: a.What is the EOQ? b.What is the reorder point? c.How many orders per year?d.What is the total annual cost?
Company X has a demand of 75 Lakhs per year. Setup cost and holding cost are $29 and $35 per unit. Number of pieces in a order includes 2.3 Lakhs per order. Printing is done 300 days and 2 days to deliver this magazine. ⚫What can be the EOQ of this? With above data find the Setup Cost and Holding cost for a year. What is the Reorder Point. ⚫What is the annual demand to production ratio in this case. What does it indicate for the company?
A company has a demand for 25,750 units annually. The holding cost is 33% of the item cost which is $10.00. The ordering or set-up cost is $250.00 per order and the lead time is 5 days. Assume that there are 350 days per year Suppose a price break of $50 per order is offered for purchase quantities of 2,000 or greater. Question: What is the reorder point for this inventory strategy? What is the inventory position immediately after an order is placed for the inventory strategy that you have selected?
Discount-Mart, a major East Coast retailer, wants todetermine 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 Discount-Mart place with SpecialtyLighting per year?
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?
William Bevi lle's computer training school, inRichmond, stocks workbooks with the following characteristics:Demand D = 19,500 units/ yearOrdering costS = $25/ orderHolding cost H = $4/ unitjyeara) Calculate the EOQ for the workbooks.b) What are the annual holding costs for the workbooks?c) What are the annual ordering costs?
The yearly demand of a product is 15000 units. Annual inventory holding cost is $25 per unit. The fixed ordering cost is $75. There are 300 work days in a year and the lead time is 2 working days. (a) Find the economic order quantity (b) Find the annual holding cost. (c) Find the annual ordering cost. (d) Compute the reorder point.
You are the operations manager of a firm that uses the continuous review (EOQ) system to control your inventory. Suppose the firm operates 52 weeks per year, 365 days, and has the following characteristics for its primary item: Demand = 25,000 units/year %3D Ordering Cost = $30/order Holding Cost = $8/unit/year Lead Time = 2 weeks Standard Deviation in weekly demand = 100 units %3D What is the economic order quantity for this item? Between 400 and 450 units O Between 450 and 500 units Fewer than 400 units O Greater than 500 units
It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for the various items have been correctly established. You decide to test one item and choose Michelin tires, XW size 185 × 14 BSW. A perpetual inventory system has been used, so you examine this as well as other records and come up with the following data: Cost per tire $35 each Holding cost 20 percent of tire cost per year Demand 1,000 per year Ordering cost $20 per order Standard deviation of daily demand 3 tires Delivery lead time 4 days Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 98 percent. Assume the demand occurs 365 days per year. Determine the order quantity. Note: Round your answer to the nearest whole number. Determine the reorder point. Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the…
Please show work so I can understand it. A company decides to establish an EOQ for an item. The annual demand is 200,000 units. The ordering costs are $40 per order, and inventory-carrying costs are $16 per unit per year. Calculate the following: (a). The EOQ in units. (b). Number of orders per year. (c). Annual ordering cost, annual holding cost, and annual total cost