One-Eyed Toad Pottery makes custom planters for up-scaleclients. The average demand for planters is 20 per week.One-Eyed Toad’s production facility has the capacity to make25 planters per week. Setup cost is $1500. The value of finishedgoods inventory is $250 per planter. The annual per-unitinventory holding cost is 35 percent of the item’s value.a. What is the economic production lot size (ELS)?b. What is the average time between orders (TBO)?c. What is the total of the annual holding cost and setupcost?

One-Eyed Toad Pottery makes custom planters for up-scaleclients. The average demand for planters is 20 per week.One-Eyed Toad’s production facility has the capacity to make25 planters per week. Setup cost is $1500. The value of finishedgoods inventory is $250 per planter. The annual per-unitinventory holding cost is 35 percent of the item’s value.a. What is the economic production lot size (ELS)?b. What is the average time between orders (TBO)?c. What is the total of the annual holding cost and setupcost?

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Description: One-Eyed Toad Pottery makes custom planters for up-scaleclients. The average demand for planters is 20 per week.One-Eyed Toad’s production facility has the capacity to make25 planters per week. Setup cost is $1500. The value of finishedgoods inventor

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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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.
Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 3,000 rolls. The cost per roll is $1,000, and the annual holding cost is 28 percent of the cost. Each order costs $75. Part 2 a. How many rolls should Yellow Press order at a time? Yellow Press should order enter your response here rolls at a time. (Enter your response rounded to the nearest whole number.) Part 3 b. What is the time between orders? (Assume 200 workdays per year.) The time between orders is enter your response here days. (Enter your response rounded to one decimal place.)
Joe Henry's machine shop uses 2,460 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,460 Holding cost per bracket per year $1.55 Order cost per order $19.50 Lead time 2 days Working days per year 250 Part 2 a) What is the EOQ? enter your response here units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? enter your response here units (round your response to two decimal places). What would be the annual inventory holding cost? $enter your response here (round your response to two decimal places). Part 4 c) Given the EOQ, how many orders will be made annually? enter your response here orders (round your response to two decimal places). What would be the annual order cost? $enter your response here (round…
Antique manufactures old-fashioned telephones for use in movie scenes (and other displays). Antique's annual demand for rotary telephones is 33,000 units per year, so it needs just as many receptors to assemble the phones. Receptors are ordered from a supplier, and shipping and handling costs are $15 per order (regardless of how many units are on order). The holding costs are $7/unit/year. If the current company policy calls for orders of 3,000 receptors, what are the total annual inventory costs for the receptors? round your final answer to the nearest whole dollar.
What trade-offs are involved in each of these aspects of inventory management?b. Treating holding cost as a percentage of unit price instead of as a constant amount.
Yellow Press, Inc., buys paper in 1,500-pound rolls for print-ing. Annual demand is 2,500 rolls. The cost per roll is $800,and the annual holding cost is 15 percent of the cost. Eachorder costs $50 to process.a. How many rolls should Yellow Press, Inc., order at a time?b. What is the time between orders?
Alfredo’s Pizza purchases its pizza delivery boxes from a printing supplier. Alfredo’sdelivers on average 225 pizzas each month. Boxes cost 43 cents each, and each ordercosts (ordering cost) $12.50 to process. Because of limited storage space, the managerwants to charge inventory holding (holding cost) at 25 percent of the cost of a box. Thelead time is 7 days, and the restaurant is open 360 days per year, assuming 30 days permonth.Calculate the following:a. Economic Order Quantityb. Expected number of orders (Order Frequency)c. Average inventoryd. The annual holding cost.e. The annual ordering cost.f. The total annual cost of inventory managementg. Reorder point
Controlling inventory is one of Wheeled Coach’s toughest problems.Operating according to a strategy of mass customizationand responsiveness, management knows that success is dependenton tight inventory control. Anything else results in an inabilityto deliver promptly, chaos on the assembly line, and a hugeinventory investment. Wheeled Coach finds that almost 50% ofthe cost of every ambulance it manufactures is purchased materials.A large proportion of that 50% is in chassis (purchased fromFord), aluminum (from Reynolds Metal), and plywood usedfor flooring and cabinetry construction (from local suppliers).Wheeled Coach tracks these A inventory items quite carefully,maintaining tight security/control and ordering carefully so as tomaximize quantity discounts while minimizing on-hand stock.Because of long lead times and scheduling needs at Reynolds,aluminum must actually be ordered as much as 8 months inadvance. In a crowded ambulance industry in which it is the only giant, its45…
)Haulsee Inc. builds 800,000 golf carts a year and purchases the electronic motors for these carts for $370 each. Ordering costs are $540, and Haulsee's inventory carrying costs average 14% of the inventory value. What is the EOQ for Haulsee? d) Alpha Products maintains a capital structure of 40% debt and 60% common equity. To finance its capital budget for next year, the firm will sell $50 million of 11% debentures at par and finance the balance of its $125 million capital budget with retained earnings. Next year Alpha expects net income to grow 7% to $140
At theEOQ, what is the firm’s total inventory costper year, assuming safety stock = 15 units?
Bold Vision, Inc., makes laser printer and photocopier toner cartridges. The demand rate is 625 EP cartridges per week. The production rate is 1,736 EP cartridges per week, and the setup cost is $100. The value of inventory is $130 per unit, and the holding cost is 20 percent of the inventory value. Bold Vision operates 52 weeks a year. What is the economic production lot size?
At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to replenish stock is $75, and the annual cost of holding is $6.00 per book. Stock is received 6 working days after an order has been placed. No backorder is allowed. Assume 250 working days a year. **(Enter your response rounded to the nearest whole number.)** Dot Com's optimal order quantity is ______ books. What is the optimal number of orders per year? What is the optimal enterable quotation in working days quotation between orders? What is the demand during the lead time? What is the reorder Point? What is the inventory position immediately after an order has been placed?