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4. An assistant manager is reviewing the costs associated with the store's best-selling product. The data...
Demand for the Deskpro computer at Best Buy is 1,000 units per month. Best Buy incurs a fixed order placement, transportation, and receiving cost of $4,000 each time an order is placed. Each computer costs Best Buy $500 and the retailer has a holding cost of 20 percent. The store manager orders in lots of 200 units for each replenishment order. Calculate: 1. The number of times the manager should place an order (order frequency) to meet the annual demand. 2. The...
Suppose that you are the manager of a production department that
uses 2400 boxes of rivets per year. The supplier quotes you a price
of $9.50 per box for an order size of 199 boxes or less, a price of
$9.00 per box for orders of 200 to 499 boxes, and a price of $8.00
per box for an order of 500 or more boxes. You assign a holding
cost of h=20 percent of the price to this inventory. What...
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer > For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece....
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas’s fastest moving inventory item has a demand of 6000 units per year. The cost of each unit is $100.00, and the inventory carrying cost is $10.00 per unit per year. The average ordering cost is $30.00 per order. It takes about 5 days for an order to arrive, and demand for 1 week is 120 units (this is a...
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer. For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece. If...
1. (12-8) Jacqueline’s Sleep store sells water beds and assorted supplies. Her best selling bed, the “Comfort King” has an annual demand of 400 units. Ordering costs are $40 while Holding costs are $5 / unit / year. (Show all work for each problem) a. To minimize the total cost, how many Comfort King beds should be ordered each time an order is placed? b. If the Holding costs per unit are $6 instead of $5, what would be the...
The manager of a car wash received a revised price list from the vendor who supplies soap, and a promise of a shorter lead time for deliveries. Formerly the lead time was 4 days, but now the vendor promises a reduction of 25 percent in that time. Annual usage of soap is 5990 gallons. The car wash is open 360 days a year. Assume that daily usage is normal, and that it has a standard deviation of 4.0 gallons per...
One of the products sold by OfficeMax is a Hewlett-Packard LaserJet 299 printer. As purchasing manager, you have the following information for the printer: i Click the icon to view the information for the printer. a. The EOQ is 21. (Enter your response rounded to the nearest whole number.) b. The annual ordering costs and holding costs (ignoring safety stock) for the EOQ is $ 988 . (Enter your response rounded to the nearest dollar.) c. Suppose Office Max currently...
You are given the following information: Demand 5,000 Holding Cost = $50 per unit per annum Ordering Cost = $150 per order EOQ = 173.20 You have a new manager and she wants to order 4 times a year as opposed to using the number of orders per year that is required when using the EOQ. What is the difference in dollars when comparing the total annual cost between using the EOQ system and ordering 4 times a year? 7...
Given the following information, what is the Total Annual Cost when ordering and holding costs only are taken into consideration? Annual Demand 15,000 Order Quantity 500 Order Cost $30 per order Holding Cost 20% per unit per year Unit Cost 25