#1 ArcSite Electrical, which produces generators, purchases a component that is used in its generators directly from the supplier. The generator production operation requires a constant 1,000 compone...
Eagle Insurance is a large insurance company chain with a central inventory operation. The company’s fastest-moving inventory item has a demand of 80,000 units per year. The cost of each unit is $200, and the inventory carrying cost is $15 per unit per year. The average ordering cost is $60 per order. It takes about 2 days for an order to arrive. This is a corporate operation, and there are 250 working days per year. (Please show all work including...
(2) Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 7500 units, the ordering cost is $40 per order, and the annual holding cost rate is 35%. a. Assume 350 days of operation per year. Cress Electronics wants a 97.5% service level. If the lead...
Your factory manufactures tricycles. You need to purchase front wheels from the supplier. The expected annual demand (D) is 1300 units; the setup or ordering cost (S) is $8 per order, and the holding cost per unit per year (H) is $0.50. Determine optimal number of wheels to order Determine the reorder point (ROP) (without safety stock) assuming that the lead time (L) is 4 days and your factory works 250 days a year. Based on your answer in (b),...
1 6. A business is trying to identify the optimal order quantity for one of its produets. Demand 2 is constant and sells about 300 per month. Assume that the unit cost of the product is $30.00 and it costs $85 dollars to place an order. Annual holdings costs are 15% of the value 4 of the inventory. The lead times is 10 days. Answer the folloiwng inventory policy questions: 6 a. If the cost of the product is $20...
b) As a contractor to Petronas, East Technology uses 4000 valves for repairing one of Petronas plant every year. These valves are purchased from a supplier 200 km away. The following information is known about the valves Table Q3b: Forecast demand for plastic product Annual demand 4000 Holding cost /valve/vear Order cost/ year RM 9 RM 25 s days Lead time Working days per year 250 Given the above information, calculate i) The economic order quantity (EOQ)? ii) The annual...
Bright Star School purchases an activity box from a local supplier in quantity (D) of 18000 boxes per annum. Annual carrying cost (H) is 5 % of the price of box and ordering cost (S) is AED 200 per order. The school is open 250 days a year. The price of each box is AED 220. Apply the Economic Order quantity model of Inventory management and answer the following: Determine the optimal number of the items to order in one...
The Las Vegas Corporation purchases a critical component from one of its key suppliers. The operations manager wants to determine the economic order quantity, along with when to reorder, to ensure the annual inventory cost is minimized. The information obtained from historical data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Round your answers according to the input instructions for...
Excel Online Structured Activity: EOQ Calculation The Las Vegas Corporation purchases a critical component from one of its key suppliers. The operations manager wants to determine the economic order quantity, along with when to reorder, to ensure the annual inventory cost is minimized. The information obtained from historical data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Round your answers...
A juice company purchases components from a variety of sources through their global network of suppliers. They are looking to determine their order quantity for PET bottles. They have forecast their demand for PET bottles for the next year to be 1195295 cases. Being a standard component, sales are expected to be constant/uniform over the course of the year. They operate 5 days per week so each year is made up of 260 days. The lead time for PET bottles...
Please explain the below problem and show the calcuation correct answers are at the end of the problem. The Larkspur Furniture Company's chair manufacturing requires multiple shades of wood stain. The most popular stain color is "Warm Oak”. The company's production operation uses 560 cases per year of this stain. The ordering cost is $43 per order. The company estimates the holding costs at $8 per case per year. The lead time to receive a shipment from the supplier is...