Intro to Operations Managment Wk 3 Assignment, management homework help

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Chapter 6 Assignment

  • Complete questions 1, 3, 4, 5 and 6 on pages 227 and 228.

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CHAPTER 6 Independent Demand Inventory 227 SOLVED PROBLEM P-System: Fixed Period The demand for a given type of socks at a sporting goods stote is 1976 par the holding cost is so so per pals of socis per year, and the setup cost is $20 per order. Lead time is 3 weeks and a = 4. A cycle-service level of s8 percent is Determine the period (P) and the target inventory desired SOLUTION V7-12-1,976=520 EOQ We first calculate the economic order quantity as EOQ = 50.50 = 158,080 = 397.59 which we round up to 398. Next, we calculate the period that best approximates this Eog, using Equa- tion 6 P= D. 1,967 pairs of socks/year where D. = 52 weeks/year = 38 pair of socks/week P = 398 = 10.46 weeks 38 which we round to the nearest integer, or 10 weeks. Next, we determine the target inventory level, T, by first looking up the num- ber of standard deviations of demand that corresponds to 88 percent. From the Appendix, we look for the value closest to 0.8800; there is a value of 0.8790 (Z = 1.17) and a value of 0.8810 (2 = 1.18), so we use z = 1.175 as a rough interpolation between the two values. We also use = 01013 = 0;VP+ L = 4/10 + 3 = 14.42. T = Dp-2 + Zopet = 38 pair of socks/week. (10 + 3) + 1.175. 4.V10+ 3 = 494 + 16.95 = 510.95 which we round up to 511. QUESTIONS 1. The current order quantity for Paul's Pasta Pin. wheels is 200 boxes. The order cost is $4 per or der, the holding cost is $0.40 per box per year, and the annual demand is 500 boxes per year. a. Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 200 boxes. b. Calculate the EOQ and the total annual cost for this order quantity. 2. The current order quantity for Electric Powerbars is 100 bars. The order cost is $10 per order, the holding cost is $0.25 per box per year, and the annual demand is 2,000 bars per year, a. Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 100 bars. b. Calculate the EOQ and the total annual cost for this order quantity, c. How many orders per year are necessary when Q = 100? How many orders per year are neces. sary for the EOQ in part b? d. Graph the annual inventory cost (IC) using MS Excel. Show the holding cost, ordering cost, and total inventory cost as a function of order size Q. Tools and Tactical issues 228 3. Hottenstein indult a totes atta do a great deal of printing. The fam was a single match repair shop buys batteries for a variety of products. The most frequent battery purchase is onder cost is 81 por onder and the holding cont. cartridges of 450 per te onde os 15 per order and the incompetent per Cartridge photo for as with demand of .000 per year. The soso per battery Given the following price schedule, calculate the optimal order quantity Number of Batterie 50.00 How mainted their What is the more 4. Burgerpose who handle food to be on the annual demand for clorosso bolo 200 per year. The order cost is podend the ying costs 25 percent et box per year of the purchase cost of $20 How many boxes of gloves should Burgerma order at one time b. What is the time between orders What would be the change in annual costi Burgerama had storage space for only 15 boxes per order and thus was forced to use an order quantity of 152 5. Office Express sells office suppliers to businesses on a membership basis-le walk-in customers without a membership are not allowed. The com pany delivers supplies directly to the purchaser as long as a minimum purchase of S100 is made. In order to encourage bulk orders Office Express offers the following discount schedule on pur- chase quantities of boxes of paper. Larry's Lumber has annual demand of 5,000 boxes of paper a setup cost of $10 per order, and a holding cost of 22 percent of the purchase price. Calculate the optimal order quantity 1-100 boxes $5 per box 100-249 boxes 54.75 per box 250-499 boxes $4.50 per box 500 or more boxes 54.25 per box An appliance nature purchases the tub portion of washing machines from a supplier with these prices less than 500, 520 each 500 999 19 each 1.000-199 518 each: 1.400 1.000, 317 each and 2,000 or more, 16 each Order costs are $30 per order annual demand is 10,000 tubs, and holding costs are 30 percent of purchase cost. Determine the order quantity that will minimize total cost 8. Al Kitchens, Inc, installs kitchen cabinets, coun tertops, and floors. Al uses 30,000 tubes of caulk per year (assume So weeks per year in the instal. lation process. The order cost is $24 per order, and the holding cost is $0.25 per tube of caulk. The lead time for an order is I week, and the standard deviation of demand is 25 tubes per wook .. What is Al's optimal order quantity? b. What is the optimal number of orders per What is the reorder point if Al desires a cye service level of 50 percent? d. What value of a should be used if Al wishes achieve a cycle service level of 94 percent? e. What should the reorder point be?
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Last Name 1
Name
Professor’s Name
Class
Date
Questions 1,3,4,5, & 6
Question 1: The current order quantity for Paul’s Pasta Pin-wheels is 200 boxes. The order
cost is $4 per order, the holding cost is $0.40 per box per year, and the annual demand is
500 boxes per year.
Part A: Calculate the annual holding cost plus the annual ordering cost to get the total annual
cost when using an order quantity of 200.
Holding cost = (Order Quantity in units/2) * Holding cost per unit
Holding cost = (200/2)*0.4 =$ 40
Annual order cost = (Annual demand/Order Quantity)*order cost per order
Annual order cost = (500/200)*4 = $10
The total cost = 40 + 10 = $50
Part B: Calculate the EOQ and the total annual cost for this order quantity.
EOQ = √2𝐷𝑆/𝐻
4

= √2 ∗ 500...


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