A product has demand of 1000 units per year. Ordering cost is $30 and holding cost is $6 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost per year in total annual inventory costs. $800 $400 $300 $600 O Cannot be determined because unit price is not known.
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- The purchasing agent for a company that assembles and sells air-conditioning equipment in a Latin American country noted that the cost of compressors has increased significantly each time they have been reordered. The company uses an EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?An SKU costing $10 is ordered in quantities of 500 units; annual demand is5200 units, carrying costs are 20% and cost of placing an order is $50.Calculate1. Average inventory2. Number of orders placed per year3. Annual Inventory carrying cost4. Annual Ordering cost5. Annual total costDuring the last 5 weeks, demands for a certain SKU at a retailer were 7 units (5 weeks ago), 4 units, 4 units, 4 units, and 5 units (last week). The retailer uses a period review model with order-up-to level 71 units, a review period of 2 weeks, and the lead time is 11 weeks. It is time to order. How much should the retailer order?
- 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?Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit. To provide a 98 percent service probability, what must the reorder point be? Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be?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. % &…
- The facility manager for the buildings on the campus of a company that designs video games is considering the inventory policy for hand sanitizer. Apply the EOQ model to the following quantity discount situation for which D-600 units per year, C. $45, and the annual holding cost rate is 20%. (Round your answers to the nearest integer) Discount Category Discount (%) Unit Cost $10.00 1 2 Order Size 100 or more What order quantity do you recommend? 09₁ 9₂ Since Q, is over 0 to 99 0 3 $9.70 its limit of 99 units, Q, cannot be Order Quantity Q₁-78 9₂-79 x xApply the EOQ model to the following quantity discount situation in which D=500 units per year, C0=$40, and the annual holding cost rate is 20%. What order quantity do you recommend? Discount Category Order Size Discount (%) Unit Cost 1 0 to 99 0 $10 2 100 or more 3 $9.70Daily demand for product sample kits is normally distributed with a mean of 35 units and a standard deviation of 4. Supply is virtually certain with a lead time of 9 days. The cost of placing an order is $20, and annual carrying costs for one kit is 25 percent. The price of one kit is $12.50. Assume a year has 365 days.If a 99% service level is desired, what is average inventory on hand? If demand had no variation, what would the reorder point be?
- ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (C) Reorder Point and Economic Order Quantity19. What would the average number of boxes be if the safety stock from Part A was kept and the EOQ from Part Bwas followed? Round off to two decimal places.20. How much would the carrying cost for the year be based on item 19?21. How much would the total inventory related (ordering plus carrying) costs be if the…= = +E v No Spacing Normal Aav Replace Heading 1 Reuse Dictate Editor Files Paragraph Styles Editing Reuse Files Voice Editor Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation 9999 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. Text…The demand rate for a product is 100 units per month. Each time an order is placed, a fixed cost of $40 is incurred. The purchase price for the product is $12 and its selling price is $20. The inventory holding cost rate is 20% per year. If the order lead time is 4 months, what is the reorder level of the (s, Q) policy?