L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) L. Houts Plastics Charlotte Inventory Levels Item Code Avg. Value Inventory (units) ($/unit) Dollar Volume % of Dollar Volume 1289 420 3.50 1470 2347 300 4.00 1,200 36.05 2349 120 2.50 300 9.01 2363 65 1.50 98 2394 60 1.75 105 3.15 2395 25 2.25 56 6782 20 1.15 23 0.69 7844 12 2.05 25 0.74 8210 10 2.00 20 8310 7 2.00 14 0.42 9111 6 3.00 18 0.54 3,328

L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) L. Houts Plastics Charlotte Inventory Levels Item Code Avg. Value Inventory (units) ($/unit) Dollar Volume % of Dollar Volume 1289 420 3.50 1470 2347 300 4.00 1,200 36.05 2349 120 2.50 300 9.01 2363 65 1.50 98 2394 60 1.75 105 3.15 2395 25 2.25 56 6782 20 1.15 23 0.69 7844 12 2.05 25 0.74 8210 10 2.00 20 8310 7 2.00 14 0.42 9111 6 3.00 18 0.54 3,328

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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L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) Item Code Avg. Inventory (units) Value ($/unit)1289 380 3.252347 300 4.002349 120 2.502363 70 1.302394 60 1.752395 25 1.756782 20 1.157844 12 2.058210 10…
L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) L. Houts Plastics Charlotte Inventory Levels Item Code Avg. Inventory (units) Value ($/unit) Dollar Volume % of Dollar Volume 1289 380 3.50 insert answer insert answer 2347 300 4.00 1,200 37.83 2349 120 2.50 300 9.46 2363 75 1.30 insert answer insert answer 2394 60 1.75 105 3.31 2395 25 2.00 insert…
David Alexander has compiled the following table of six itemsin inventory at Angelo Products, along with the unit cost andthe annual demand in units:IDENTIFICATION CODE UNIT COST ($) ANNUAL DEMAND(UNITS)XX1 5.84 1,200B66 5.40 1,1103CPO 1.12 89633CP 74.54 1,104R2D2 2.00 1,110RMS 2.08 961 Use ABC analysis to determine which item(s) should be care-fully controlled using a quantitative inventory technique and which item(s) should not be closely controlled.
Edwarldo’s Manufacturing uses 2,400 units of a product per year on a continuous basis. The product Carrying Cost are $60 per year and Ordering Cost are $250. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory. Show Computations and Explanations. A. Calculate the Economic Order Quantity (round up the answer to the nearest whole unit) (Format: 111) B. Calculate the Total Cost per year to order and carry this item. (Format: 1,111) C. Their supplier has notified the company that if they increase their order quantity by 58 units, they will give the company a discount. Calculate the Dollar Discount that the company will have to at least give to Edwarldo’s Manufacturing to be indifferent. (Format: 111)
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?
Howard BooksLynelle Howard owns a thriving independent bookstore in artsy New Hope,Pennsylvania. She must decide how many copies to order of a new book, Powerand Self-Destruction, an exposé on a famous politician’s lurid affairs. Interest inthe book will be intense at first and then fizzle quickly as attention turns to othercelebrities.The book’s retail price is $27 and the wholesale price is $19. The publisher willbuy back the retailer’s leftover copies at a full refund, but Howard Books incurs $5in shipping and handling costs for each book returned to the publisher.Lynelle believes her demand forecast can be represented by a normal distributionwith a mean of 310 and a standard deviation of 100.
A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered quantity.b. Determine the EOQ.c. How many orders will be placed per year using the EOQ?d. Calculate ordering, holding, and total inventory costs for the EOQand also determine the change in total inventory cost.A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered…
Genesis Company is a wholesaler. It purchases 60,000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma.Example: 10,000 Required: a. Compute the economic order quantity. b. How many orders would be placed under the EOQ policy? c. Compute the annual ordering cost for the EOQ. d. Compute the annual carrying cost for the EOQ. e. Compute the total inventory-related cost at the EOQ.
It’s 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 x 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 $55 each Holding cost 15 percent of tire cost per year Demand 1,180 per year Ordering cost $ 36 per order Standard deviation of daily demand 7 tires Delivery lead time 8 days Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 95 percent. Assume the…
Cheryl Druehl has asked you to help her determinethe best ordering policy for a new product. The demand for thenew product has been forecasted to be about I ,000 units annually.To help you get a handle on the carrying and ordering costs,Cheryl has given you the list of last year's costs. She thought thatthese costs might be appropriate for the new product. She also told you that these data were compiled for 10,000 inventoryitems that were carried or held during the year. You havealso determined that 200 orders were placed last year. Your job as a new opera tions management graduate is to help Cheryl determinethe economic order quantity for the new product.
Sam’s Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about these bags.Demand = 90 bags/weekOrder cost = $54/orderAnnual holding cost = 27 percent of costDesired cycle@service level = 80 percentLead time = 3 weeks 118 working days2Standard deviation of weekly demand = 15 bagsCurrent on-hand inventory is 320 bags, with no open orders or backorders.a. What is the EOQ? What would be the average time between orders (in weeks)?b. What should R be?c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?d. The store currently uses a lot size of 500 bags (i.e., Q = 500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?e. What would be the annual cost saved by shifting from the 500-bag lot size to the…
A local artisan uses supplies purchased from an overseas supplier. The ownerbelieves the assumptions of the EOQ model are met reasonably well. Minimization ofinventory cost is her objective. Relevant data, from the files of the credit firm, are annualdemand (C) = 240 units, ordering cost (B) = 42 MU/order, and holding cost = 4MU/unit/year.a) How many should she order at one time?b) How many times per year will she replenish its inventory of this material?c) What will be the total inventory costs associated with this material? Please mention formulas and do it in detail so I can understand.