What is the investment in average inventory? (b) What is the annual ordering cost?
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Abalos Appliance Store sells an average of 160 units per month. Each order the store places is for 300 units. The cost per unit is P5. The cost per order is P12. Carrying cost is P0.15 per dollar invested per year. The rate of return is 18 percent. The tax rate is 46 percent.
Requirement:
- (a) What is the investment in average inventory?
- (b) What is the annual ordering cost?
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- The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?I need answers A company uses on an average 216 parts a day with a standard deviation of 16 parts per day in a manufacturing process. Cost of placing and receiving an ordering is BDT 40,000. Estimated monthly carrying cost is BDT 90 per part. Orders are delivered approximately 7 days after being placed. The delivery time is normal with a mean of 7 days and a standard deviation of 2 days. The company is open 360 days per year. Find the order quantity that is economical. If the Company takes 3% stock out risk, then find safety stock (SS) quantity and Re-Order Point? 3.If the supplier offers a discount of BDT 8 per circuit board for purchasing of 4000 boards at a time, then financially evaluate and justify whether the company will go with the offer or not? 4.The person who orders the boards follows this rule: Order when the amount on…
- (c) A company which produces washing machines has to store a certain item, and two such items are needed to assemble one washing machine. Annual demand for machines is 1000 units. The following information is available. Ordering cost = Rs.250 per order Inventory holding cost = Rs.125 per unit per year Back-order cost = Rs.150 per unit per year Find the following. i) Economic order quantity ii) Optimum level of shortageRegional Supermarket is open 355 days per year. Daily use of cash register tape averages 20 rolls. Usage appears normally distributed with a standard deviation of 2 rolls per day. The cost of ordering tape is $.75, and carrying costs are 41 cents per roll a year. Lead time is 4 days. Use Table1 and Table2. a. What is the EOQ? (Round your answer to the nearest whole number.) EOQ 118 b. What ROP will provide a lead time service level of 51.6 percent? (Round up your answer to the nearest whole number.) ROP 61Discount-Mart, a major East Coast retailer, wants to determine the economic order quantity for its halogen lamps. It currently buys all halogen lamps from Specialty Lighting Manufacturers, in Atlanta. Annual demand is 2,000 lamps, ordering cost per order is $60, carrying cost per lamp is $12. a) What is the EOQ? lamps per order (round your response to the nearest whole number).
- Rajesh Indian Market (RIM) is open 12 months out of the year. At RIM, the demand for rice is very consistent 200 pounds per month. RIM orders the rice from a distributor in India at an ordering cost of $50 per order. Rice costs $5 per pound, and annual carrying charge is 15%. What is the annual total cost? (round up to the nearest whole number)A hospital buys disposable surgical packages from Pfisher, Inc. Pfisher’s price schedule is $50.25 perpackage on orders of 1 to 199 packages and $49.00 per package on orders of 200 or more packages.Ordering cost is $64 per order, and annual holding cost is 20 percent of the per-unit purchase price.Annual demand is 490 packages. What is the best purchase quantity?Intan Store sells 240,000 cabinets per year. Based on the company's policy, a safety stock of 4 percent from yearly sales is to be maintained. The carrying cost is RM0.60 per unit annually and the ordering costs are RM150.00. The delivery time is 10 days. Order should be placed in multiple of 100 units. i. Compute the economic order quantity (assume 360 days per year). ii. Compute the total inventory cost. iii. Compute the reorder inventory level. iv. Compute the average inventory please answer complete
- Intan Store sells 240,000 cabinets per year. Based on the company's policy, a safety stock of 4 percent from yearly sales is to be maintained. The carrying cost is RM0.60 per unit annually and the ordering costs are RM150.00. The delivery time is 10 days. Order should be placed in multiple of 100 units. i. Compute the economic order quantity (assume 360 days per year). ii. Compute the total inventory cost. iii. Compute the reorder inventory level. iv. Compute the average inventory. Please answer only part 4a) What is the economic order quantity? b) Find the annual holding costs.c) Find the annual ordering costs.d) What is the reorder point?Charlie’s Pizza orders all of it pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every seven weeks to take orders. Because the orders are shipped directly from Ital, they take six weeks to arrive. Charlies Pizza uses an average of 250 pounds of pepperoni each week, with a standard deviation of 18 pounds. Charlie prides itself on offering only the best –quality ingredients and a high level of service, so it wants to ensure a 95 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 470 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order? (Use the excels NORMSINV( ) function to find the critical value for the given a-level, (Round you z-value to 2 decimal places and final answer t