The manager of a car wash received a revised price list from the vendor who supplies...
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 day. The ordering cost is $35 and annual carrying cost is $3.0 a gallon. The revised price list (cost per gallon) is shown in the following table: Order Size..........Unit Price ---------------------------------------------------- 1--399 .................2 400--499..............1.7 500++................1.62 The store manager is considering to provide a service level of 0.60. - How much is the Quantity from EOQ? (Keep two decimal places)
- How much is the total annual inventory related costs (holding, ordering, and purchase costs) if the car wash order the quantity from EOQ model?
-How much is the total annual inventory related costs (holding, ordering, and purchase costs) if the bakery orders just enough to get the soap at the price of $1.7?
-How much is the total annual inventory related costs (holding, ordering, and purchase costs) if the car wash orders just enough to get the soap at the price of $1.62?
-What is the car wash's optimal order quantity, given this quantity discount information?
-How often (in "days") should the car wash order?
-How long (in days) is the lead time?
-What is the Z value for the desired service level?
-How much safety stock is needed to provide the desired service level?
-What is the ROP for the desired service level?
Homework Answers
Economic Order Quantity refers to the number of unit the company should add to the inventory and the order is made to minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs. Reorder point is the level of inventory which the firm holds in stock and when the inventory level reach this point, the firm must reorder the item.
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The manager of a car wash received a revised price list from the
vendor who supplies...
The manager of a car wash received a revised price list from the vendor who supplies soap, and a ...
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 8 days, but now the vendor promises a reduction of 25 percent in that time. Annual usage of soap is 4650 gallons. The car wash is open 360 days a year. Assume that daily usage is normal, and that it has a standard deviation of 3.0 gallons per...
can you show how to do this work Question 13 Using a computerized Inventory Management System,...
can you show how to do this work
Question 13 Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores X and their distribution warehouse. The Paint Supply Store franchise sells an average of 74 gallons of Purple Paint every week (for 52 weeks per year, Standard Deviation of the Demand - 8 gallons). They purchase Purple Paint from their supplier at a price...
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $35 per delivery...
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $35 per delivery (no matter how much is delivered) and $1.20 per gallon. Joe’s annual holding cost per unit is 35 percent of the price per gallon. Joe uses 250 gallons of malt per week. Suppose Joe orders 1000 gallons each time. What is his average inventory (in gal)? Suppose Joe orders 1500 gallons each time. How many orders does he place with his supplier each year?...
Need help on E, F, and G. PA 12-3 Joe Birra needs to purchase malt for...
Need help on E, F, and G.
PA 12-3 Joe Birra needs to purchase malt for his... Joe Birra needs to purchase malt for his micro-brew production. His supplier charges $40 per delivery (no matter how much is delivered) and $1.25 per gallon. Joe's annual holding cost is 30% of the price per gallon. Joe uses 200 gallons of malt per week. a. Suppose Joe orders 125 gallons each time. What is his average inventory? gallons (Round your answer to...
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of...
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 64 gallons of Green Paint every week (for 52 weeks per year). They purchase Green Paint from their supplier at a price of $3.50 per gallon. [The company does not hold Safety Stock] It takes 2.25 weeks to receive an order...
Southern Office Supplies Inc.
Southern Office Supplies Inc. distributes office supplies to customers in the Southeast. One popular SKU is laser printer paper. Ordering costs are $51.00 per order. One ream of paper costs $3.80, and Southern uses a 25 percent annual inventory-holding cost rate. The average annual demand is 15,500 reams and historical data shows that the standard deviation of weekly demand is about 72. The lead time from the manufacturer is 3 weeks. The data has been collected in the Microsoft Excel...
One of the products sold by OfficeMax is a Hewlett-Packard LaserJet 299 printer. As purchasing manager,...
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...
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she...
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....
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs. T. True F. False 2- The Economic Order Quantity (EOQ) model tells us........ A. how much to order B. which are higher - holding or ordering costs C. how to use price discounts D. when to order 3- When tracking or counting inventory items, we should focus on which items most? A. A-items B. B-items C. C-items D. D-tems 4- The Economic Order Quantity...
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she...
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...
can you show how to do this work
Question 13 Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores X and their distribution warehouse. The Paint Supply Store franchise sells an average of 74 gallons of Purple Paint every week (for 52 weeks per year, Standard Deviation of the Demand - 8 gallons). They purchase Purple Paint from their supplier at a price...
Need help on E, F, and G.
PA 12-3 Joe Birra needs to purchase malt for his... Joe Birra needs to purchase malt for his micro-brew production. His supplier charges $40 per delivery (no matter how much is delivered) and $1.25 per gallon. Joe's annual holding cost is 30% of the price per gallon. Joe uses 200 gallons of malt per week. a. Suppose Joe orders 125 gallons each time. What is his average inventory? gallons (Round your answer to...
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 64 gallons of Green Paint every week (for 52 weeks per year). They purchase Green Paint from their supplier at a price of $3.50 per gallon. [The company does not hold Safety Stock] It takes 2.25 weeks to receive an order...
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...
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....
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