A buyer for a large vehicle manufacturer has determined that the annual demand for number 6...
A buyer for a large vehicle manufacturer has determined that the annual demand for number 6 screws is 100,000 screws. She estimates that it costs $10 every time she places an order. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Additionally, it takes approximately 8 working days for an order of number 6 screws to arrive once the order has been placed. The demand is considered quite stable and therefore about 500 screws are used per working day. Determine the optimal inventory policy for ordering and include order quantity, frequency of orders and what would be the average inventory? What would be the annual ordering cost? What would be the annual holding cost? Suppose that the current policy is to order number 6 screws 2 times per year. How much, if any would be saved by changing this current policy?
Homework Answers
Economic Order Quantity is the number of unit that is added to the inventory which minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs.
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A buyer for a large vehicle manufacturer has determined that the
annual demand for number 6...
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....
2. win Lee has determined that the annual demand for number 6 screws is 100,000 screws....
2. win Lee has determined that the annual demand for number 6 screws is 100,000 screws. Irwin, who works in his brother's hardware store, is in charge of purchasing. He estimates that it costs $10 every time an order is placed. This cost includes his wages, the cost of the forms used in placing the order, and so on. Furthermore, he estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. (a)...
Alexander Cherry has determined that the annual demand for number 6 screws is 2. 200,000 screws....
Alexander Cherry has determined that the annual demand for number 6 screws is 2. 200,000 screws. Alexander, who works in his brother's hardware store, is in charge of purchasing. He estimates that it costs $10 every time an order is placed. This cost includes his wages, the cost of the forms used in placing the order, and so on. Furthermore, he estimates that the cost of carrying one screw in inventory for a year is one-half of 5 cents. (a)...
QUESTION 2 It is a requirement that you complete Industrial Engineering Practice I and II before you can raduate...
QUESTION 2 It is a requirement that you complete Industrial Engineering Practice I and II before you can raduate. Your brother owns a hardware store and on the occasions you have worked in the store you have notice his business experience problems with inventory holding. You offered your assistance in solving some of the inventory problems. During your observations you determine the annual demand for number six screws is 100 000. For the purpose of the Work Integrated Learning exercise,...
The annual demand for a product has been projected to be 2,000 units. This demand is...
The annual demand for a product has been projected to be 2,000 units. This demand is assumed to be constant throughout the year. The ordering cost is $20 per order, and the holding cost is $20 percent of the purchase cost. Currently, the purchase cost is $40 per unit. There are 250 working days per year. Whenever an order is placed, it is known that the entire order will arrive on a truck in 6 days. If the holding cost...
Exercise 2.1 Lila Battle has determined that the annual demand for number six screws is 100,000...
Exercise 2.1 Lila Battle has determined that the annual demand for number six screws is 100,000 screws. Lila, who is in charge of purchasing, estimates that the daily demand is 500 screws, and the order quantity is 10000. i) If delivery of an order takes 10 days, find the ROP and decide when to order. ii) If delivery of an order takes 21 days, find the ROP and decide when to order.
A local family sports store sells basketball. The store orders the balls from a manufacturer at...
A local family sports store sells basketball. The store orders the balls from a manufacturer at a cost of $250 per order. The annual holding cost is $6 per unit per year. The purchase price of a basketball is $40 per unit per year. The store has a demand for 48,000 balls per year. The s tock is received 5 working days after an order has been placed. No backorders are allowed. Assume 300 working days a year. a. What...
4a. A computer company has annual demand of 100,000. They want to determine EOQ for circuit...
4a. A computer company has annual demand of 100,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $200. What is the EOQ? 2000 4b. A computer company has annual demand of 100,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $200. What is the total annual inventory cost (setup and...
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation
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...
2. Annual demand for a famous speaker component for small stereo na for a famous speaker...
2. Annual demand for a famous speaker component for small stereo na for a famous speaker component for small stereo systems is 40,000. Collin Releford estimates that the ordering cost is $15 per order. Furthermore, carrying cost is estimated to be $3 per year. At this time, it takes 30 days between the time that Collin places an order and the time the order is received. During this time demand is 250 units. a) What is the optimal number of...
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....
2. win Lee has determined that the annual demand for number 6 screws is 100,000 screws. Irwin, who works in his brother's hardware store, is in charge of purchasing. He estimates that it costs $10 every time an order is placed. This cost includes his wages, the cost of the forms used in placing the order, and so on. Furthermore, he estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. (a)...
Alexander Cherry has determined that the annual demand for number 6 screws is 2. 200,000 screws. Alexander, who works in his brother's hardware store, is in charge of purchasing. He estimates that it costs $10 every time an order is placed. This cost includes his wages, the cost of the forms used in placing the order, and so on. Furthermore, he estimates that the cost of carrying one screw in inventory for a year is one-half of 5 cents. (a)...
QUESTION 2 It is a requirement that you complete Industrial Engineering Practice I and II before you can raduate. Your brother owns a hardware store and on the occasions you have worked in the store you have notice his business experience problems with inventory holding. You offered your assistance in solving some of the inventory problems. During your observations you determine the annual demand for number six screws is 100 000. For the purpose of the Work Integrated Learning exercise,...
Exercise 2.1 Lila Battle has determined that the annual demand for number six screws is 100,000 screws. Lila, who is in charge of purchasing, estimates that the daily demand is 500 screws, and the order quantity is 10000. i) If delivery of an order takes 10 days, find the ROP and decide when to order. ii) If delivery of an order takes 21 days, find the ROP and decide when to order.
4a. A computer company has annual demand of 100,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $200. What is the EOQ? 2000 4b. A computer company has annual demand of 100,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $200. What is the total annual inventory cost (setup and...
2. Annual demand for a famous speaker component for small stereo na for a famous speaker component for small stereo systems is 40,000. Collin Releford estimates that the ordering cost is $15 per order. Furthermore, carrying cost is estimated to be $3 per year. At this time, it takes 30 days between the time that Collin places an order and the time the order is received. During this time demand is 250 units. a) What is the optimal number of...
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