Management Models and Operation Research
Inventory control subject to known demand (1)
A food store considers importing a special kind of smoked sausages for sale. The store estimates that the demand is stable at 2100 per year. The cost of placing an order and get it delivered is $ 2000., and the cost of the sausages is $18.50. each. The store uses an annual internal interest rate of 22% for the cost of capital. In addition, they operate with a storage cost of 3% of the value of the item, and a cost of 2% for taxes and insurance.
a) What is the optimal order size of the sausages and how often should they be ordered?
b) What is the ordering cost and the holding cost with this strategy?
c) How many sausages should be on stock when a new order is placed if the lead - time is 3 weeks?
d) The market price for a sausage is estimated to $30. What annual profit can the store expect on this product?
e) The manager of the store realizes that the sausages will have a shelf life of 6 weeks after they are delivered at the store. How will this affect the ordering strategy? What will the holding costs, the ordering costs and the profit be with this new assumption
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4. An assistant manager is reviewing the costs associated with the store's best-selling product. The data...
4. An assistant manager is reviewing the costs associated with the store's best-selling product. The data available is: Demand - 500 units/year Ordering cost- $90/order Holding cost-$1/unit/year a. What is the EOQ and its associated ordering and holding costs? b. If annual demand doubles and the ordering cost is brought down to $80 and holding cost remains at $1, what is the new EOQ and total annual cost?
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of...
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 64 gallons of Green Paint every week (for 52 weeks per year). They purchase Green Paint from their supplier at a price of $3.50 per gallon. [The company does not hold Safety Stock] It takes 2.25 weeks to receive an order...
Case 2: Lila Battle has determined that the annual demand for number 6 screws is 100,000...
Case 2: Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother's hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent....
neighborhood sports wear store sells a pair of Victoria sneakers due to the recent fitness school...
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Bundaberg Glass Company is a distributor of car windscreens. The windscreens are manufactured in Japan and...
Bundaberg Glass Company is a distributor of car windscreens. The windscreens are manufactured in Japan and shipped to Bundaberg. The management is expecting an annual demand of 30 000 windscreens. The purchase price of each windscreen is $500. Currently, company orders 250 windscreens per order. According to the management, it takes two (2) weeks to receive a new order, and the company works a 6-day week for 50 weeks each year. Other costs associated with ordering and maintaining an inventory...
A firm has been ordering a certain item 600 units at a time. The firm...
A firm has been ordering a certain item 600 units at a time. The firm estimates that ordering cost is $200/order, and that annual demand is 1800 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of holding cost (H: avg $cost of holding one piece for 1 year) would their ordering policy (600 units per order) be economically optimal (be the EOQ)? EOQ = Sq Root[(2D*S)/H] Where: D...
Family Food Distributor (FFD) distributes products to grocery stores. The company began operation sixth months ago with...
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A firm desires to control inventory levels so as to minimize the sum of holding and...
A firm desires to control inventory levels so as to minimize the sum of holding and ordering costs. The firm estimates its inventory holding costs at $4/unit/year, and ordering cost at $50/order. Weekly demand is fixed at 200 units and there are 50 weeks in the work year. (QUESTIONS 3, 4, 5) What is the economical ordering quantity? 50 b. 1000c. 2000 d. 250 e. 500 What is the total annual holding cost? 50 b.1000 c. 2000 d 250 e....
can you show how to do this work Question 13 Using a computerized Inventory Management System,...
can you show how to do this work
Question 13 Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores X and their distribution warehouse. The Paint Supply Store franchise sells an average of 74 gallons of Purple Paint every week (for 52 weeks per year, Standard Deviation of the Demand - 8 gallons). They purchase Purple Paint from their supplier at a price...
4. An assistant manager is reviewing the costs associated with the store's best-selling product. The data available is: Demand - 500 units/year Ordering cost- $90/order Holding cost-$1/unit/year a. What is the EOQ and its associated ordering and holding costs? b. If annual demand doubles and the ordering cost is brought down to $80 and holding cost remains at $1, what is the new EOQ and total annual cost?
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 64 gallons of Green Paint every week (for 52 weeks per year). They purchase Green Paint from their supplier at a price of $3.50 per gallon. [The company does not hold Safety Stock] It takes 2.25 weeks to receive an order...
Case 2: Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother's hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent....
Bundaberg Glass Company is a distributor of car windscreens. The windscreens are manufactured in Japan and shipped to Bundaberg. The management is expecting an annual demand of 30 000 windscreens. The purchase price of each windscreen is $500. Currently, company orders 250 windscreens per order. According to the management, it takes two (2) weeks to receive a new order, and the company works a 6-day week for 50 weeks each year. Other costs associated with ordering and maintaining an inventory...
A firm desires to control inventory levels so as to minimize the sum of holding and ordering costs. The firm estimates its inventory holding costs at $4/unit/year, and ordering cost at $50/order. Weekly demand is fixed at 200 units and there are 50 weeks in the work year. (QUESTIONS 3, 4, 5) What is the economical ordering quantity? 50 b. 1000c. 2000 d. 250 e. 500 What is the total annual holding cost? 50 b.1000 c. 2000 d 250 e....
can you show how to do this work
Question 13 Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores X and their distribution warehouse. The Paint Supply Store franchise sells an average of 74 gallons of Purple Paint every week (for 52 weeks per year, Standard Deviation of the Demand - 8 gallons). They purchase Purple Paint from their supplier at a price...
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