An eyeglass retailer buys lenses from a supplier at $100 each. The retailer orders 250 lens pairs every year and the ordering cost is $36. Carrying costs per year (based on average inventory) are estimated to be 20% for each pair. The supplier offers a 10% on order quantities of 50 or more lens pairs. Determine the best order quantity and total cost
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An eyeglass retailer buys lenses from a supplier at $100 each. The retailer orders 250 lens pairs every year and the ordering cost is $36. Carrying costs per year (based on average inventory) are estimated to be 20% for each pair. The supplier offers a 10% on order quantities of 50 or more lens pairs. Determine the best order quantity and total cost
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- Wang Distributors has an annual demand for an air-port metal detector of 1,400 units. The cost of a typical detector to Wang is $400. Carrying cost is estimated to be 20% of the unit cost,and the ordering cost is $25 per order. If Ping Wang, the owner,orders in quantities of 300 or more, he can get a 5% discount on thecost of the detectors. Should Wang take the quantity discount?A large hospital buys a specialized, single use medical grade plastic container for its use in the Operation Theaters. The plastic containers are available from a few suppliers and one unit of the box costs Rs. 2,000. The surgical sections (including the operating theaters) in the hospital work for 250 days a year and the daily consumption rate is four boxes. The suppliers take 7 working days to replenish an order. The ordering cost is Rs. 2,000 per order and the carrying cost is 20 percent. The hospital has been utilizing an Economic Order Quantity (EOQ) model for inventory planning with respect to these boxes. The supplier has of late introduced a Minimum Order Quantity (MOQ) restriction for all its buyers based on some internal exercise. The MOQ is 150 boxes. In the meantime, the hospital plans to launch some improvement initiatives. This will bring down the ordering cost by 20 percent. The hospital may need to spend a sum of Rs. 10,000 towards these initiatives. A new supplier is…Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?
- Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 97,200 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. What is the economic ordering quantity? How many orders will be placed during the year? What will the average inventory be? What is the total cost of ordering and carrying inventory?Ollah's Organic Pet Shop sells bags of cedar chips for pet bedding or snacking (buyers choice). The supplier has offered the following terms: Order 1-100 bags, and the price is $6.00 a bag. Order 101 or more and the price is $4.50 a bag. Annual demand is 630, fixed ordering costs are $9 per order, and the per bag holding cost is estimated to be around $2 per year. What order quantity should Ollah order, based on the volume discount? Is this different from the EOQ? if so how could this be? please show calculations.Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
- Daily 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?A company is targeting a cycle service level of 25%. What should their reorder point be if they have an average weekly demand of 100, a weekly demand standard deviation of 20, and a lead time of 5 weeks?A boutique cafe in the city operates 365 days a year. The cafe has an annual demand for food products of 60,000 units with an equal daily demand across the year with the standard deviation of the daily demand of 60 units. The supplier of the products charges the cafe the base rate of the products’ price of $200 per unit and the base rate for the ordering cost including delivery of $500 per order. The supplier has agreed that it will take four days to fulfill (deliver) the orders for the cafe. The products are kept in the cafe's store, and the annual holding cost per unit is 5% of the product’s unit price. In order to build a long-term relationship, the supplier offers discounted prices for different order quantities. For any order quantity below 2,000 units, the products and the ordering cost will be priced at the base rate. For any order quantity between 2,000 and 4,999 units, the cafe will receive a 5% discount on the base rate of the products’ price and a 10% discount on the base…
- A producer distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Currently, the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using EOQ?Maroons Medical Supplies, Inc. must order masks from its supplier in lots of 1 dozen boxes. Given the information provided below, complete the following table: Annual demand 26,000 dozen Cost per order placed P30 Carrying cost 20% Price per dozen P7.80 Order Size (Dozen) 250 500 1,000 2,000 13,000 26,000 Number of orders Average inventory Carrying cost Order cost Total cost 1. What is the EOQ? Please include/fill the table and solve for EOQ. Thank you so much!An increase in Economic Order Quantity will lead to Increase in Ordering cost Reduction in inventory carrying cost Reduction in ordering cost and increase in inventory carrying cost Increase in ordering cost and reduction in inventory carrying cost