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5 points Consider an item with item cost 100. The cost per order is 75 and...
An automobile manufacturer stocks a certain inventory item. The daily demand for the inventory item is...
An automobile manufacturer stocks a certain inventory item. The daily demand for the inventory item is 20 units. The company estimates its annual holding cost for this item to be $10 per unit. The cost to place and process an order from the supplier is $200. The company operates 300 days per year, and the lead time to receive an order from the supplier is 3 working days on average. (a) Find the economic order quantity. (b) Find...
Eagle Insurance is a large insurance company chain with a central inventory operation. The company’s fastest-moving...
Eagle Insurance is a large insurance company chain with a central inventory operation. The company’s fastest-moving inventory item has a demand of 80,000 units per year. The cost of each unit is $200, and the inventory carrying cost is $15 per unit per year. The average ordering cost is $60 per order. It takes about 2 days for an order to arrive. This is a corporate operation, and there are 250 working days per year. (Please show all work including...
Assume an inventory control system for an independent demand item where the Lead-time is 4 days...
Assume an inventory control system for an independent demand item where the Lead-time is 4 days and the Review Period is 15 days. The expected demand for the end-item is 20,000 units per year. Assume, further, that the manager wants to achieve a cycle service level of 95% in her Q system and she knows that the daily average demand is 10 units (demand is normally distributed). She has determined that her facility is open 250 days a year; her...
EOQ, reorder point, and safety stock Alexis Company uses 631 units of a product per year...
EOQ, reorder point, and safety stock Alexis Company uses 631 units of a product per year on a continuous basis. The product has a fixed cost of $41 per order, and its carrying cost is $4 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:...
EOQ, reorder point, and safety stock Alexis Company uses 805 units of a product per year...
EOQ, reorder point, and safety stock Alexis Company uses 805 units of a product per year on a continuous basis. The product has a fixed cost of $50 per order, and its carrying cost is $4 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:...
The reorder point is defined as the lead-time demand for an item. In cases of long...
The reorder point is defined as the lead-time demand for an item. In cases of long lead times, the lead-time demand and thus the reorder point may exceed the economic order quantity Q*. In such cases, the inventory position will not equal the inventory on hand when an order is placed, and the reorder point may be expressed in terms of either the inventory position or the inventory on hand. Consider the economic order quantity model with D = 9,000,...
A firm is operating a fixed inventory system. One product has the following characteristics: Order cost...
A firm is operating a fixed inventory system. One product has the following characteristics: Order cost $35/order Unit cost $15/unit Holding cost/unit/year 20% of unit cost Annual demand 1800 Lead time 2 weeks Answer the following questions: a. What is the optimal order quantity, EOQ? b. What is the total annual inventory cost? c. If management decides to use order size of 400 rather than the EOQ, what will be the impact on total cost? (Calculate) c. If demand is...
EOQ, reorder point, and safety stock Alexis Company uses 907 units of a product per year...
EOQ, reorder point, and safety stock Alexis Company uses 907 units of a product per year on a continuous basis. The product has a fixed cost of $57 per order, and its carrying cost is $5 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:...
The annual demand for a product is 64,000 items and the holding cost is $0.50 item/year....
The annual demand for a product is 64,000 items and the holding cost is $0.50 item/year. 1) What will be the Economic Order Quantity and the total annual cost if the cost of placing each orde is $250? b) If the company operates 300 days per year and the lead time is 9 days, find the recorder point assuming that the daily demand is constant c) Now suppose that the daily demand is Normal with mean as implied from the...
EOQ, reorder point, and safety stock Alexis Company uses 631 units of a product per year on a continuous basis. The product has a fixed cost of $41 per order, and its carrying cost is $4 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:...
EOQ, reorder point, and safety stock Alexis Company uses 805 units of a product per year on a continuous basis. The product has a fixed cost of $50 per order, and its carrying cost is $4 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:...
A firm is operating a fixed inventory system. One product has the following characteristics: Order cost $35/order Unit cost $15/unit Holding cost/unit/year 20% of unit cost Annual demand 1800 Lead time 2 weeks Answer the following questions: a. What is the optimal order quantity, EOQ? b. What is the total annual inventory cost? c. If management decides to use order size of 400 rather than the EOQ, what will be the impact on total cost? (Calculate) c. If demand is...
EOQ, reorder point, and safety stock Alexis Company uses 907 units of a product per year on a continuous basis. The product has a fixed cost of $57 per order, and its carrying cost is $5 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:...
The annual demand for a product is 64,000 items and the holding cost is $0.50 item/year. 1) What will be the Economic Order Quantity and the total annual cost if the cost of placing each orde is $250? b) If the company operates 300 days per year and the lead time is 9 days, find the recorder point assuming that the daily demand is constant c) Now suppose that the daily demand is Normal with mean as implied from the...
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