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- Variety Manufacturer purchases a component from a Asian supplier. The demand for that component is exactly 70 units each day. The company is open for business 250 days each year. When the company reorders the product, the lead time from the supplier is exactly 10 days. The product costs $14.00. The company determined that its inventory carrying cost is 20%. The company’s order cost is $30.00. What is the annual holding cost?Your local grocery store stocks rolls of bathroom tissue in single packages and inmore economical 12-packs. You are trying to decide which to buy. The singlepackage costs 45 cents and the 12-pack costs $5. You consume bathroom tissue ata fairly steady rate of one roll every three months. Your opportunity cost of moneyis computed assuming an interest rate of 25 percent and a fixed cost of $1 for theadditional time it takes you to buy bathroom tissue when you go shopping. (We areassuming that you shop often enough so that you don’t require a special trip whenyou run out.)b. Determine if it is more economical to purchase the bathroom tissue in 12-packs.Your local grocery store stocks rolls of bathroom tissue in single packages and inmore economical 12-packs. You are trying to decide which to buy. The singlepackage costs 45 cents and the 12-pack costs $5. You consume bathroom tissue ata fairly steady rate of one roll every three months. Your opportunity cost of moneyis computed assuming an interest rate of 25 percent and a fixed cost of $1 for theadditional time it takes you to buy bathroom tissue when you go shopping. (We areassuming that you shop often enough so that you don’t require a special trip whenyou run out.)c. Are there reasons other than those discussed in the problem that would motivate you not to buy the bathroom tissue in 12-packs?
- Your local grocery store stocks rolls of bathroom tissue in single packages and inmore economical 12-packs. You are trying to decide which to buy. The singlepackage costs 45 cents and the 12-pack costs $5. You consume bathroom tissue ata fairly steady rate of one roll every three months. Your opportunity cost of moneyis computed assuming an interest rate of 25 percent and a fixed cost of $1 for theadditional time it takes you to buy bathroom tissue when you go shopping. (We areassuming that you shop often enough so that you don’t require a special trip whenyou run out.)a. How many single rolls should you be buying in order to minimize the annualholding and setup costs of purchasing bathroom tissue?A factory orders supplies every 5 days. The lead time for deliveries is 8 days. Demand for wax averages 15 pounds per day with a standard deviation of 1.8 pounds. The holding cost for wax is $0.57 per pound per day. The factory wants to achieve an in-stock probability rate of 99.99% for wax. Round your answer to one decimal place. On average, how many pounds of wax will the factory have on order? poundsStaples buys printer cartridges for $20. The demand for the cartridges is 300 per month. Staples incurs a fixed cost for managing the cartridges of $100. Their annual holding cost is 20%. Calculate Inventory turns per year Number of orders Staples makes per year.
- A company usually holds 310 pounds of wax in its warehouse. The company uses 48 pounds of wax per day and it takes 8 days for wax purchased from the supplier to arrive. The holding cost for wax is $0.37 per pound per day. Round your answer to two decimal places. What is the company's average holding cost (per pound for wax)? dollarsA factory orders supplies every 8 days. The lead time for deliveries is 5 days. Demand for iron averages 18 pounds per day with a standard deviation of 2.1 pounds. The holding cost for iron is $0.45 per pound per day. The restaurant wants to achieve an in-stock probability rate of 98% for iron. Round your answer to one decimal place. On average, how many pounds of iron will the factory have on hand? poundsCompany C&A sells 600 bottles of a dietary supplement per week at $100 per bottle. The supplement is ordered from a supplier who charges Company C&A $30 per order and $50 per bottle. Company C&A’s annual holding cost percentage is 40%. Assume Company C&A operates 50 weeks in a year. What should C&A’s EOQ for this item be? What is C&A’s total annual cost using this EOQ?
- A firm purchases and resells widgets. Holding one widget in inventory for one year costs the firm $8. The firm purchases widgets in lots of 48. Demand for widgets is 4 per week. Each time the firm orders widgets from the supplier, there is a $50 charge for transportation. Round your answer to two decimal places. What is the total transportation cost incurred by the firm over one year (52 weeks)? dollarswhat effect has inventory management (as separate from increasing sales) on cash? Why/how can inventory management be critical? Investigate the costs of owning inventory.Demand for a product is relatively constant at 5 units per day. Lead time for this product is normally distributed with a mean of 20 days and a standard deviation of 4 days. (a) What reorder point provides an 80 percent service level? (b) What reorder point provides a 90 percent service level? (c) If the lead time standard deviation can be reduced from 4 days to 1, what reorder point now provides 90 percent service? How much is safety stock reduced by this change?