Question

please solve this ASAP

a) OMS-Tech "an electronic company in Dubai" used to keep their product in the warehouse and sells it through an adjoining showroom. The estimated annual demand of 100,000 units, an annual carrying cost of 200 AED per unit, and an ordering cost of 1000 AED. ii The store wants to determine the optimal order size The store would also like to know the number of orders that will be made annually In addition they want to determine the time between orders (ie, the order cycle) given that the store is open every day except Sunday Finally they want to calculate the annual total cost b) OMS-Tech wants to calculate the suitable safety stock before deciding to place their orders. The befow table shows the current scenarios for the stock out iv. 0 19 296 3% Expected Shortage Percentage of the demand Probability of shortage occurrence 0.40 0.30 0.20 0.10 Considering the carrying cost per unit per year in (a) and the stock-out cost is estimated 500 AED. What the level of safety stock should OMS-Tech use for this product? C) Differentiate between the fours processing types and give example for each type. Stock-out costs - Stock-out cost x Expected shortage Units of Probability of Shortage occurrence x Number of orders per year Annualordering cost=Pc,

Answer 1

Answer a=

i= Optimal order size= (2*d*s/h)^05(2*100000*1000/200)^0.5 =1000 units

ii= Number of orders= D/EOQ=100000/1000 =100

iii= Time between orders= Q/D=1000/10000=0.01 year/order or 0.01*(365-52) =3.13 days /order

iv=Annual total cost= (D/Q)*S+(Q/2)*H= (100000/1000)*1000 +(1000/2)*200 =200000 AED