Lead time usage refers to the length of period it takes to order and receive goods and also called the reorder period. True False
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- Problem 12-3 (Static) A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. a. Determine the economic order quantity. (Round your final answer to the nearest whole number.) Economic order quantity b. What is the average number of bags on hand? (Round your final answer to the nearest whole number.) Average number of bags c. How many orders per year will there be? (Round your final answer to the nearest whole number.) Number of orders per year bags d. Compute the total cost of ordering and carrying flour. (Round your final answer to the nearest whole number.) Total cost e. If annual holding costs were to increase by $9 per bag, how much would that affect the minimum total annual cost? (Round your Intermediate calculations to 2 decimal places and final answer to 2 decimal places.) Increase byTOPIC : Inventory Systems for Independent DemandQuestion 23 A truck maintenance facility has annual demand of 25000 gallons of motor oil and operates 360 days per year. The lead time from placement of an order for motor oil until delivery is 5 days and the standard deviation of daily usage is 12.5 gallons. Use z=1.28 for a 90% service level and determine the appropriate re-order point. O 347.22 gallons 35.77 gallons 383 gallons 370 gallons
- which of the following is not included in carrying cost a ) obsolescence b) Insurance c ) Extra staffing d ) Order processingQUESTION 25 In the economic order quantity (EOQ) model, where does the optimal order quantity value exist? OWhere holding cost is greater than ordering cost Where ordering cost is minimized Where ordering cost is zero Where ordering cost equals holding cost. Click Save and Submit to save and submit. Click Save All Answers to save all answers.(EOQ calculations) A downtown bookstore is trying to determine the optimal order quantity for a popular novel just printed in paperback. The store feels that the book will sell a four times its hardback figures. It would, therefore, sell approximately 4,000 copies in the next year at a price of $1.50. The store buys the book at a wholesale figure of $1. Costs for carrying the book are estimated at $0.10 a copy per year, and it costs $20 to order more books. a. Determine the EOQ. b. What would be the total costs for ordering the books 1, 4, 5, 10, and 15 times a year? c. What questionable assumptions are being made by the EOQ model? a. What is the economic order quantity (EOQ)? copies (Round to the nearest whole number.) GULD
- 36 [Question text] The Swank Furniture Company is trying to determine the optimal order quantity for rocking chairs. Annual sales are 1,200 units, and the retail price is RM40 per unit. The carrying cost is 20 % of its price. It costs RM20 to prepare and receive an order. The company currently order 100 units per order with a total inventory cost of RM660. The calculated economic order quantity (EOQ) equals 77 units. Should the company continue to order 100 units every time it places an order or change the quantity to the calculated EOQ? Select one: A. Use the calculated EOQ as the company will pay only RM40. B. Continue to order 100 units as there will be no differences in total cost. C. Continue to order 100 units and enjoy an RM40 cash discount. D. Use the calculated EOQ as the total cost will be reduced by RM40.How do we do inventoryAverage demand (µ) 480 Demand Standard deviation (σdLT) 35 Service level 85% Service level alternate 89% 1. What is the required safety stock at a 85 percent service level? ______ units 2. What is the reorder point? ______ units 3.What is the required safety stock at a 89 percent service level? ______ units 4. What is the additional safety stock? ______ units
- Q3. (Inventory Buildup). Gary manages a receiving station for peanuts. Peanuts-filled trucks arrive at the rate 10 every hour from 6:00 am to 6:00 pm. Each truck contains 75 kilograms of peanuts. Gary can process them at a rate of 500 kilograms an hour. The station has room to hold only 2000 kilograms of peanuts in inventory prior to processing. Once this space is filled, the trucks must wait to dump their contents. (a) Draw the inventory buildup diagram. Mark the area corresponding to the total truck driver waiting time in the diagram. Total Inventory (units of measure: 1000 kilograms) 4 2 0 6am 10am 2pm 6pm (b) At what time will the trucks start to wait to unload? 10pm 2amQuestion 4 Illustrate Guardian pharmacy’s reorder system to manage their inventory so meet customer expectation. answer guidelines To use order point system and periodic review system. Illustrate its characteristics/advantage in the context of managing inventory in a pharmacy. For example: 1. Order point system - When the quantity of an item on hand in inventory falls to a predetermined level, an order is placed. • The quantity ordered is based on economic order quantity (EOQ). • Order quantity are usually fixed. • The order point is determined by the average demand during the lead time. • If the average demand or the lead time changes, there is no corresponding change in the order point, effectively there is a change in the safety stock. • The interval between replenishment are not constant but vary depending on the actual demand during the order cycle. Usually used for stocks that are longer to sell from the store so to…Which of the following is NOT an assumption of the basic EOQ model? Question 29 options: No stockouts are allowed. Annual demand is constant and known. Quantity discounts are available. Lead-time is constant and known.