Suppose that for a given inventory item holding cost (H) is $34 per year per unit in inventory. If we use an order quantity (Q) of 182, what will annual holding cost be? (Do not include a "$" in your answer and round your answer to 1 decimal place).
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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.Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffler. Annual demand Standard deviation of daily demand Item cost Annual holding cost 5,700 mufflers 5 mufflers per working day 30 per muffler 30% of the item value Use the above information to determine the best order size and the reorder point. Order Size = 252, R = 47 Order Size = 243, R = 40 Order Size = 300, R = 46 O Order Size = 302, R = 23 Ordering cost Service probability Lead time Working days $ 50 per order 90 % 2 working days 300 per yearAnnual demand= 360 units Holding cost per year = 1 $ per unit Ordering cost = $ 100 per order Compute EOQ , total cost(holding and ordering cost),no of order per year and expected time (days) between orders(Assuming a 300-day work ) and what would the actual total holding and ordering costs be if the annual demand was actually higher than estimated i.e 500 units instead of 360 units, but the EOQ established above is used. If demand for an item is 3 units per day, and delivery lead time is 15 days, what would be the re-order point?
- It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for the various items have been correctly established. You decide to test one item and choose Michelin tires, XW size 185 × 14 BSW. A perpetual inventory system has been used, so you examine this as well as other records and come up with the following data: Cost per tire $35 each Holding cost 20 percent of tire cost per year Demand 1,000 per year Ordering cost $20 per order Standard deviation of daily demand 3 tires Delivery lead time 4 days Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 98 percent. Assume the demand occurs 365 days per year. Determine the order quantity. Note: Round your answer to the nearest whole number. Determine the reorder point. Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the…10 Use the information presented in the graph to answer the following questions: Annual Cost C3 C2 Q1 You are also given the following information: Q1 =450 .Q2 = 700 C1 = 350 C2 = 750 1300 Q2 Order Quantity Which annual inventory cost component does the blue line represent? Total cost Which annual inventory cost component does the green line represent? Holding cost What is the Economic Order Quantity (EQ9) based on th Which annual inventory cost component does the red line represent? Ordering cost 220Do you think the safety stock (safety inventory) could be negative? What is the meaning of a negative safety inventory (hint: safety stock is the difference between the optimal inventory and the average demand)?
- Al Fursan Inc, needs 300 kgs of a material per month (four weeks). It costs RO 10 to make and receive an order, and it takes 16 work days to receive it. The annual holding cost is 15 % of purchase price. The price RO 1 per kg. The company is operating 6 days per week. What is the economic order quantity (EOQ)? Round-up to the nearest integer- Select one: a. 593 kg b. 693 kg c. 690 kg d. 267 kgThompson Paint Company uses 60,000 gallons of pigment per year. The cost of ordering pigment is $200 per order, and the cost of carrying the pigment in inventory is $1 per gallon per year. The firm uses pigment at a constant rate every day throughout the year. a. Calculate the EOQ. b. If it takes 20 days to receive an order once it has been placed, determine the reorder point in terms of gallons of pigment. (Note: Use a 365-day year.)Consider the following data: Annual Usage in units -- 62,500; Working days per year -- 360; Cost to Carry -- P 5; Cost to Order -- P 2.50; Reorder Point -- 120. 1.What is the average inventory?2. How much is the total ordering cost?3. How much is the total cost to order and cost to carry
- EOQ, reorder point, and safety stock Alexis Company uses 916 units of a product per year on a continuous basis. The product has a fixed cost of $60 per order, and its carrying cost is $3 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. a. Alexis' EOQ is units. (Round to the nearest whole number.)Suppose that R&B Company has a soft drink product that shows a constant annual demand rate of 3600 cases. Ordering costs are $20 per order and holding costs are $0.77. Find the EOQ. Round to two decimal places. __________________ Find the order cost using the EOQ as the quantity. Round to two decimal places. _________________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?