A retailer anticipates selling 5,400 units of its product at a uniform rate over the next year. Each timethe retailer places an order for æ units, it charged a flat fee of $100. Carrying costs are $27 per unitper year. How many times should the retailer reorder each year and what should be the lot size tominimize inventory costs? What is the minimum inventory cost? Use the formula EOQ to obtain youranswers.They should orderunitsThe minimum inventory cost is $times a year.

Annual demand (D)=5,400 units Odering cost (S) = $100 Carrying cost (H) = $27

Answered: A retailer anticipates selling 5,400…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

The company uses 150,000 gallons of alcohol per month. The cost of carrying the alcohol in inventory is P0.50 per gallon per year, and the cost of ordering is P150 per order. The firm uses the alcohol at a constant rate throughout the year. It takes 18 days to receive an order once it is placed. The reorder point is?
What is reorder point and provide an example of it.
Demand for a product is relatively constant at 5 units per day. Lead time for this product is normally distributed with a mean of 20 days and a standard deviation of 4 days. (a) What reorder point provides an 80 percent service level? (b) What reorder point provides a 90 percent service level? (c) If the lead time standard deviation can be reduced from 4 days to 1, what reorder point now provides 90 percent service? How much is safety stock reduced by this change?
Recognize the important relationship between inventory management and delivering the perfectcustomer order
Explain the purchase decision and the inventory model for a single cycle?
The National Company uses 150,000 gallons of hydrochloric acid per month. The cost of carrying the chemical in inventory is 60 cents per gallon per year, and the cost of ordering the chemical is P150 per order. The firm uses the chemical at a constant rate throughout the year. The chemical's economic order quantity is?
I need answers A company uses on an average 216 parts a day with a standard deviation of 16 parts per day in a manufacturing process. Cost of placing and receiving an ordering is BDT 40,000. Estimated monthly carrying cost is BDT 90 per part. Orders are delivered approximately 7 days after being placed. The delivery time is normal with a mean of 7 days and a standard deviation of 2 days. The company is open 360 days per year. Find the order quantity that is economical. If the Company takes 3% stock out risk, then find safety stock (SS) quantity and Re-Order Point? 3.If the supplier offers a discount of BDT 8 per circuit board for purchasing of 4000 boards at a time, then financially evaluate and justify whether the company will go with the offer or not? 4.The person who orders the boards follows this rule: Order when the amount on…
Discount-Mart, a major East Coast retailer, wants to determine the economic order quantity for its halogen lamps. It currently buys all halogen lamps from Specialty Lighting Manufacturers, in Atlanta. Annual demand is 2,000 lamps, ordering cost per order is $60, carrying cost per lamp is $12. a) What is the EOQ? lamps per order (round your response to the nearest whole number).
What is Consignment Inventory? Advantages and disadvantages of Consignment Inventory for Vendors?
B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?
At a recent manufacturing workshop, XYZ, Incorporated explained that demand for disposable masks increase rapidly in March 2020 when quarantine mandates first took effect. At the time, retailers could only place a single order to cover demands through the end of the summer. A certain retailer purchased disposal masks from a supplier at a cost of $20 per unit and sold them for $30 per unit. By the end of summer, demand for masks subsided considerably and all masks that weren't sold during the summer could be sold at a discounted price of $18 per unit. The retailer estimated that demand between March and August would be Normally distributed with mu = 10,000 and sigma = 1525 units With, supply chains becoming more stable since March 2020, the retailer is currently in the process of establishing a contract with a disposable mask supplier. The supplier has agreed to sell masks to the retailer for $18 per unit and will make deliveries any time the supplier places an order for a cost of $100…
Describe inventory accuracy and cycle counting ?

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS