9. A company stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. This company estimates its annual holding cost for this item to be $25 per unit. The cost to place an order from the supplier is $75. (13 Points) a) Find the economic order quantity (EOQ). b) Find the annual holding costs. c) The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. What is the reorder point?
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- PHL Manufacturing assembles security monitors. It purchases 900 black-and-white cathode ray tubes per month at $80 each. Ordering costs are $30, and annual carrying costs are 25 percent of the purchase price. - a) Determine the optimal quantity (4 points) - b) Find the total annual cost of ordering and carrying the inventory (2 points) - c) If the supplier offer a price of $79 per tube for ordering 1200 tubes in a lot, would you evaluate and advise PHL to take advantage of the offer?total inventory cost An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The supplier pays $28 for each battery and estimates that the annual holding cost is 30 percent of the battery’s value. It costs approximately $20 to place an order (managerial and clerical costs). The supplier currently orders 100 batteries per month. a) Determine the ordering, holding, and total inventory costs for the current order quantity. b)Determine the ordering, holding, and total inventory costs for the EOQ. How has ordering cost changed? Holding cost? Total inventory cost?An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The supplier pays set up cost equal to $20 for each battery and estimates that the annual holding cost is $8.4. The working days for the company are 300 days per year Determine the economic order quantity (EOQ). b. How many orders will be placed per year using the EOQ? c. What is the expected time between orders? d. Determine the ordering, holding, and total inventory costs for the EOQ
- 3. Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $24 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. Part 2 a) What is the economic order quantity? _____ units (round your response to the nearest whole number). b) What are the annual holding costs? $_______ (round your response to the nearest whole number). c) What are the annual ordering costs?_______ $(round your response to the nearest whole number). d) What is the reorder point?_______ units (round your response to the nearest whole number).(a) Ignoring taxation, calculate the optimum order level of inventory over a one-year planning period using the EOQ model. (b) Estimate the level of safety inventory that should be carried by Toyzrfun Ltd. (c) If Toyzrfun Ltd were to be offered a quantity discount by its suppliers of 1% for orders of 30 000 units or more, evaluate whether it would be beneficial for the company to take advantage of the quantity discount. Assume for this calculation that no safety inventory is carried. (d) Estimate the expected total annual costs of inventory management if the EOQ had been (i) 50% higher, and (ii) 50% lower than its actual level. Comment upon the sensitivity of total annual costs to changes in the EOQ... 12.41 Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level. a) What safety stock level do you recommend for BX-5? b) What is the appropriate reorder point? PX ..12.42 Based on available information, lead time demand for PC jump drives averages 50 units (normally distributed), with a stand- ard deviation of 5 drives. Management wants a 97% service level. a) What value of Z should be applied? b) How many drives should be carried as safety stock? c) What is the appropriate reorder point? Px ... 12.43 Authentic Thai rattan chairs (shown in the photo) are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $30 per unit per year, and the cost…
- Suzuki is a company that manufactures motorcycles. It produces 450 motorcycles a month. It buys tyres for motorcycles from Dunlop at a cost of $20 per tyre. The company’s inventory carrying cost per tyre is estimated to be 15% of the cost per tyre. The cost per order is calculated at 250% of the cost per tyre. Rquirement: i) Calculate the EOQ. ii) Determine the number of orders per year? iii) Compute the total cost.Suria Enterprise has 15 items in the inventory. The annual demand and unit cost for each item are listed in Table Q1(a). i) Recommend an ABC classification system for the inventory. Table Q1(a) Annual Demand (unit) Item Unit cost ($) AA 3000 10.00 BB 2000 1.80 CC 3000 75.00 DD 2500 1000.00 ЕЕ 5000 300.00 FF 7000 2.50 GG 1000 5.00 HH 5000 12.00 JJ 4000 20.00 KK 2500 100.00 LL 1500 38.00 MM 1000 25.00 NN 3500 25.00 PP 3000 200.00 QQ 4000 240.00ABC INVENTORY CLASSIFICATION A company trades with a number of items and the management is interested in classifying the items contained in the warehouse according to the order of importance, by the capital retained in the warehouse.the items contained in the warehouse according to the order of importance, by the capital retained in the warehouse.The following is a list of the items the company deals with and their respective demand and cost.demand and cost. c) Will you be able to decide with the classification tool which of the items can no longer be marketed by the company?
- EOQ, reorder point, and safety stock Alexis Company uses 916 units of a product per year on a continuous basis. The product has a fixed cost of $60 per order, and its carrying cost is $3 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. a. Alexis' EOQ is units. (Round to the nearest whole number.)William Bevi lle's computer training school, inRichmond, stocks workbooks with the following characteristics:Demand D = 19,500 units/ yearOrdering costS = $25/ orderHolding cost H = $4/ unitjyeara) Calculate the EOQ for the workbooks.b) What are the annual holding costs for the workbooks?c) What are the annual ordering costs?Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, themean lead time demand for bandage BX-5 was 60 (and wasnormally distributed). Furthermore, the standard deviationfor BX-5 was 7. Ms. Flynn would like to maintain a 90%service level. a) What safety stock level do you recommend for BX-5?b) What is the appropriate reorder point?