An aircraft company uses rivets at an approximate demand rate of 2,500 kg per year. Each...
An aircraft company uses rivets at an approximate demand rate of 2,500 kg per year. Each unit costs $ 30 per kg and the company personnel estimate that it costs $130 to place an order and that the carrying cost of inventory is 10 % per year. How frequently should orders for rivets be placed? Determine the optimum size of each order?
Find EOQ, Order frequency T, Number of orders N and TC
Homework Answers
Data: λ(D) = 2,500 Kg. per year
C3 = Rs. 130/-
i = 10%
H = i * c = 30 * 10% = 3
p = Rs. 30/- per unit. (C1 = i × p = 0.10 × 30 = Rs. 3/-)
qo = 
/ ip
qo = 
/ 0.10 × 30 = App. 466 units.
to = qo = / 
= 466 / 2500 = 0.18 year = 0.18 × 12 = 2.16 month.
N = Number of orders =
/ qo = 2500 / 466 = 5 orders per year.
EOQ = sqrt(2DS/H)
= sqrt(2*2500*130/3)
= sqrt(216666.67)
= 465.47 units
Order Frequency = R / EOQ
= 2500 / 465.47
= 5.37 orders
Numer Orders is same as order frequency.
Add Answer to:
An aircraft company uses rivets at an approximate demand rate of
2,500 kg per year. Each...
Suppose that you are the manager of a production department that uses 2400 boxes of rivets...
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...
A company decides to establish an EOQ for an item. The annual demand is 400,000 units,...
A company decides to establish an EOQ for an item. The annual demand is 400,000 units, each costing $8, ordering costs are $32 per order, and inventory-carrying costs are 20%. Calculate the following: a. The EOQ in units b. Number of orders per year c. Cost of ordering d. Cost of carrying inventory e. Total Cost
An health center uses 1000 splints per year, with a uniform demand rate. The workers estimate...
An health center uses 1000 splints per year, with a uniform demand rate. The workers estimate that to place each order from a local supplier the health center has to spend about $5.00 for the call and paperwork. The ankle splints cost $12.00 each and holding costs are based on a 20% annual rate. Determine: 1) The economic order quantity and frequency of orders. 2) The total annual fixed order cost, total annual holding cost, and the total overall annual...
Aqua Pure purchases 50,000 gallons of distilled water each year. Ordering costs are $100 per order,...
Aqua Pure purchases 50,000 gallons of distilled water each year. Ordering costs are $100 per order, and the carrying cost, as a percentage of inventory value, is 80 percent. The purchase price to CCC is $0.50 per gallon. Management currently orders the EOQ each time an order is placed. No safety stock is carried. The supplier is now offering a quantity discount of $0.03 per gallon if CCC orders 10,000 gallons at a time. Should CCC take the discount? WHY?...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company's inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Quantity purchased Price per unit 1 to...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company’s inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Discount category 1 2 3 Quantity purchased...
Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying...
Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used...
Calculate the EOQ size for the following case. What is the EOQ size and the number...
Calculate the EOQ size for the following case. What is the EOQ size and the number of orders placed per quarter? For your answer, round up the figures up to 0 decimal points. (size/number) The average demand for the item is 540 units per quarter. It costs $150 to place an order. The item's price is $250 per unit and carrying cost ratio for the year is 20%. 147 units/4 times per quarter 147 units/15 times per quarter 74 units/15...
CHAP 15 - Q13 DROPDOWN OPTIONS ARE BELOW THIS 13. Calculate economic ordering quantity (EOQ) Inventory...
CHAP 15 - Q13
DROPDOWN OPTIONS ARE BELOW THIS
13. Calculate economic ordering quantity (EOQ) Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs are the direct and indirect costs of keeping inventory on hand. The number of units in the optimal size order is called the economic ordering quantity (E0Q). Murphy Company purchases custom-made durable packing boxes to...
2. A specialty coffee house sells Colombian coffee at a steady rate of 285 pounds per...
2. A specialty coffee house sells Colombian coffee at a steady rate of 285 pounds per year. The beans are purchased from a local supplier for $3.00 per pound. An estimated $38 are spent in paperwork and labor each time an order is placed for the coffee beans, and holding costs are based on a 20 percent annual interest rate. The lead time for an order to arrive from the supplier is exactly 1 month after it is placed. a....
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...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company's inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Quantity purchased Price per unit 1 to...
Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used...
CHAP 15 - Q13
DROPDOWN OPTIONS ARE BELOW THIS
13. Calculate economic ordering quantity (EOQ) Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs are the direct and indirect costs of keeping inventory on hand. The number of units in the optimal size order is called the economic ordering quantity (E0Q). Murphy Company purchases custom-made durable packing boxes to...
2. A specialty coffee house sells Colombian coffee at a steady rate of 285 pounds per year. The beans are purchased from a local supplier for $3.00 per pound. An estimated $38 are spent in paperwork and labor each time an order is placed for the coffee beans, and holding costs are based on a 20 percent annual interest rate. The lead time for an order to arrive from the supplier is exactly 1 month after it is placed. a....
Most questions answered within 3 hours.
-
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 42 minutes ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 1 hour ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 1 hour ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 1 hour ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 1 hour ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 2 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 2 hours ago -
Consider the following reaction: C 2H 2( g) + 2H 2( g) C 2H 6(
g)...
asked 2 hours ago -
Consider a 1.0 L buffer containing 0.092 mol L-1 HCOOH and 0.100
mol L-1 HCOO-. What...
asked 2 hours ago -
Koch Realty has owned a vacant land with a FMV of
$775,000 and an adjusted basis...
asked 2 hours ago -
It is estimated 29% of all adults in United States invest in
stocks and that 85%...
asked 2 hours ago -
What does a 2-sided p value of 0.04 mean? (I am not asking if it
is...
asked 3 hours ago