Sumco's annual demand is expected to increase from 1,000 units to 1,555 units, the ordering cost is reduced to $8 per order and the average carrying cost per unit per year remains the same at $0.50. Under these new conditions: a. Calculate the new EOQ. Calculate the Annual Ordering Cost, the Annual Holding Cost and the Total Annual Cost. ) If Sumco has a daily demand of 10 units and assuming that they will be ordering the exact amount calculated for EOQ in topic (a) with a lead time of 5 days, calculate the Reorder Point (ROP) and the Inventory b. С.
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- Inventory Management Ch 12 12.40 Uriel A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (Fixed cost-$16 per order), beans are always shipped from Hawaii within exactly four days. Per-pound annual holding costs for the beans are $3. a) What is the EOQ for Kona Coffee Beans? b) What are the total annual hoding costs of stock for Kona coffee beans? c) What are the total annual ordering costs for Kona coffee beans? d) Assume the management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point be? e) What is the safety stock needed to attain a 1% risk of stockout during lead time? f) What is the annual holding cost of maintaining the level of safety stock needed to support a 1% risk? g) If management specified that a 2% risk of stockout during…• Assume that ABC company is decided to sale every tire at $ 2 per unit. Forecasted demand of tire in next year is 9,600. Annual carrying cost is $16 per tire and ordering cost is $ 75. The distributor operates 288 days a year. i. What is the EOQ? ii. Hw many times per year does the store reorder? iii. What is the length of an order cycle? iv. What is the total annual cost if the EOQ quantity is ordered?Inventory Management Ch 12 12.40 Uriel A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (Fixed cost-$16 per order), beans are always shipped from Hawaii within exactly four days. Per-pound annual holding costs for the beans are $3. e) What is the safety stock needed to attain a 1% risk of stockout during lead time? f) What is the annual holding cost of maintaining the level of safety stock needed to support a 1% risk? g) If management specified that a 2% risk of stockout during lead time is acceptable, would the safety stock holding costs decrease or increase?
- Problem 12-2 (Algo) A local distributor for a national tire company expects to sell approximately 9,780 tires of a certain size and tread design next year. Annual carrying cost is $18 per tire and ordering cost is $85. The distributor operates 283 days a year. a. What is the EOQ? (Round your answer to a whole number.) EOQ b. How many times per year does the store reorder? (Round your answer to two decimal points.) Number of Orders per Year c. What is the length of an order cycle? (Round your answer to two decimal points.) Length of Order Cycle d. What will the total annual carrying and ordering cost be if the EOQ quantity is ordered? (Round your answer to a whole number.) Total Annual Inventory CostA jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.50 per stone for quantities of 600 stones ore more, $8.90 per stone for orders of 400 to 599 stones, and $9.40 per stone for lesser quantities. The jewelry firm operates 104 days per year. Usage rate is 22 stones per day, and ordering costs are $42. Do not round intermediate calculations. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. b. If annual carrying costs are 24 percent of unit cos, what is the optimal order size? c. If lead time is 3 working days, at which point should the company reorder?Problem: 4 ABC Ltd uses EOQ to determine the order quantity for its various components and is planning its orders. The Annual Consumption is 80,000 units. Cost to place one order is RO 1200. Cost per unit is RO 50 and carrying cost is 6% of unit cost. Find A) EOQ B) Number of orders per year C) Ordering cost D) Carrying cost and E) The total cost of inventory
- Mo. M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other homes applliences. demand of 265 units, which is constant throughout the year.The carrying cost is estimated to be $1.25 per unit per year and the ordering cost is $19 per order . Please show your work for full points. (a) To minimize cost, how many units should be ordered each time an order is placed? (b) How many orders are needed per year with the optimal policy? (c) What is the total annual cost of orderieg and holding inventory?A gift shop sells Little Lentils dolls at a steady pace of 10 per day, 310 days per year. The cost of the dolls is $5, and the gift shop uses an annual interest rate of 20 percent to compute holding cost. Question 1: If the shop wants to place an average of 20 replenishments orders per year, what order quantity should it use? Question 2: If the shop calculates EOQ for ordering dolls and gets 100, what is the implied fixed order cost (K) Question 3: If the shop estimates that the cost of placing an order is $10, what is the optimal order quantity (EOQ)?Describe the difference between a fixed-quantity (Q) anda fixed-period (P) inventory system.
- Problem 20-22 (Algo) Annual demand for a product is 16,120 units; weekly demand is 310 units with a standard deviation of 55 units. The cost of placing an order is $145, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.55 per unit. a. To provide a 90 percent service probability, what must the reorder point be? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Reorder point____________ units ? b. Suppose the production manager is told to reduce the safety stock of this item by 80 units. If this is done, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round your answer to the nearest whole number.) Service probability___________%13.37. Kelly's Tavern serves Shamrock draft beer to its customers. The daily demand for beer is normally distributed, with an average of 20 gallons and a standard deviation of 4 gallons. The lead time required to receive an order of beer from the local distributor is 12 days. Determineexample 15.1 Economic Order Quantity and Reorder Point Find the eco- nomic order quantity and the reorder point, given Annual demand (D) = 1,000 units Average daily demand (d) = 1,000/365 Ordering cost (S)= $5 per order Holding cost (H) = $1.25 per unit per year Lead time (L) = 5 days Cost per unit (C) = $12.50 %3D %3D %3D What quantity should be ordered?