A company incurs an ordering cost of $40 each time it places an order, regardless of the order size. The item's cost is $45, and the annual carrying charge for the item is 10%. If annual demand for this item is 10,850 and the company's order quantity (Q) is 439, calculate its total annualized cost of inventory. The total annualized inventory costs are (Enter your response as a whole number.)
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- The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?The sales of Whole Care mouthwash at Jen's of Michigan over the past six months have averaged 2,000 cases per month, which is the current order quantity. Jen's of Michigan's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions What is EOQ? What is the cost reduction? What is the reorder point? What is Time between Orders (TBO)?The Pacific Lumber Company and Mill processes 10,000 logs annually, operating 250 days peryear. Immediately upon receiving an order, the logging company’s supplier begins delivery tothe lumber mill, at a rate of 60 logs per day. The lumber mill has determined that the orderingcost is $1,600 per order and the cost of carrying logs in inventory before they are processed is$15 per log on an annual basis. Determine The total inventory cost associated with the optimal order quantity
- Question 1 For supply item ABC, Andrews Company has been ordering 400 units per week. A new purchasing agent has been hired by the company who wants to start using the economic-order- quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Lead time, in days Ordering costs Insurance and handling costs Purchase price per unit Return on cash investment 20,800 5 $22 $7 $15 15% RequiredAlina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?You are in charge of inventory control of a highly successful product retailed by your firm. Weekly demand for this item varies, with an average of 200 units and a standard deviation of 16 units. It is purchased from a wholesaler at a cost of $12.50 per unit. You are using a continuous review system to control this inventory. The supply lead time is 4 weeks. Placingan order costs $50, and the inventory carrying rate per year is 20 percent of the item’s cost. Your firm operates 5 days per week, 50 weeks per year.a. What is the optimal ordering quantity for this item?b. How many units of the item should be maintained as safety stock for 99 percent protection against stockouts during an order cycle?c. If supply lead time can be reduced to 2 weeks, what is the percent reduction in the number of units maintained as safety stock for the same 99 percent stockout protection?d. If through appropriate sales promotions, the demand variability is reduced so that the standard deviation of weekly…
- You are in charge of inventory control of a highly successful product retailed by your firm. Weekly demand for this item varies, with an average of 350 units and a standard deviation of 15 units. It is purchased from a wholesaler at a cost of $25.00 per unit. The supply lead time is 7 weeks. Placing an order costs $55.00, and the inventory carrying rate per year is 15 percent of the item's cost. Your firm operates 6 days per week, 50 weeks per year. Refer to the standard normal table The table below shows the total area under the normal curve for a point that is Z standard deviations to the right of the mean. Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359 0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5754 0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141…The annual demand for an item is 12 000 units. Ordering cost is $80 per order and carrying cost is 20% of the unit cost of $15. Calculate: The Economic order quantity Annual ordering cost Annual carrying cost Total annual costThe materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?
- A company incurs an ordering cost of $232 each time it places an order, regardless of the order size. The item's cost is $5, and the annual carrying charge for the item is 30%. If the annual demand for this item is 2,880 and the company's order quantity (Q) is 944, calculate its total annualized cost of inventory. The total annualized inventory costs are $.Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost $ 8.00 Standard deviation of weekly demand 25 per week Order cost $ 298.00 Lead time 4 weeks Annual holding cost (%) 29 % of item cost Service probability 98 % Annual demand 28,100 Average demand 562 per week a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal order quantity units Reorder point units b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.) Holding cost $ Ordering cost $ c. Assume a price break of $50 per order was offered for purchase quantities of 2,100 or more units per order. If…A retail outlet sells a seasonal product for $10 per unit. The cost of the product is $8 per unit. All units not sold during the regular season for half the retail price in an end-of-season clearance sale. Assume that the demand for the product is uniformly distributed between 200 and 800. a. What is the recommended ordering quantity? b. What is the probability of a stockout using your order quantity in (a)? c. To keep customers happy and returning to the store later, the owner feels that stockouts should be avoided if at all possible. What is your recommended order quantity if the owner is willing to tolerate a 0.15 probability of stockout? d. Using your answer to (c), what is the goodwill cost you are assigning to a stockout?