Q2) Clancy's Motors has the folowing demand to meet for custom manufactured fuel injectorparts. The holding cost for that item is $2 per month and each setup costs $80. Lead time is 0months. Cakulate the planned order rekases using: (a) the EOQ technique, and (b) the POQtechnique. And What are the costs of each plan, including the hokling cost of any inventory kftover affer month 7? What technique performance is better.MonthRequirement 400 | 150 | 200 1502 | 3 | 4 | 5 | 6150 | 250100Answer:(a) The monthly hokling cost = $2/monthAverage monthly demand = ??? unitsThe EOQ = ??? unitsTotal inventory hekl = ??? unitsSetup costs = $???Hokling cost = $????Total cost = $????(b) POQ Interval = ?.??, round to # month.Total inventory hekl = ? unitsSetup costs = $???Hokling cost = $?Total cost = $???

Given- The monthly holding cost (H) = $2 The setup cost (S) = $80 per setup

Answered: Q2) Clancy's Motors has the following…

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...

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(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.
4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per year and ordering costs are $96. The following price schedule is offered. Determine the EOQ and the # of orders per year. # Boxes Unit Price 1000-1999 $1.25 2000-4999 $1.20 5000-9999 $1.15 10000+ $1.10 a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is 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% Required
Based on an EOQ-type ordering criterion, what costmust be taken to zero if the desire is to have an orderquantity of a single unit?
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?
2. Explain the term complementary products and illustrate using an example. 3. Explain the term "safety stock inventory". What is important when managing this part of the inventory?
4. (Inventory Management - Part 2) An item has a unit purchase cost of $50, and an inventory-carrying rate per period of 0.02. The additional data for this product is given below: Period Demand (units) Fixed Cost (S/order) (i) (ii) 1 75 100 2 0 110 3 65 100 Assuming no backordering is allowed, answer the followings: (a) Check whether the demand is lumpy or not. (b) Apply the following heuristics on the problem given above. Period Order Quantity 4 40 105 5 90 100 Silver-Meal (iii) Part-Period Balancing (c) Which of the solutions obtained in part (b) do you select? (d) Draw a network diagram to illustrate the given lot sizing problem, and calculate the cost values for each are on the network. (e) Apply the Wagner-Whitin algorithm to determine the optimal order quantities, the optimal inventory levels, and the minimum sum of the ordering and inventory carrying costs.
A large distributor of oil-well drilling equipment operated over the past two years with EOQ policies based on an annual holding cost rate of 22%. Under the EOQ policy, a particular product has been ordered with a Q* 80. A recent evaluation of holding costs shows that because of an increase in the interest rate associated with bank loans, the annual holding cost rate should be 27%. a. What is the new economic order quantity for the product? b. Develop a general expression showing how the economic order quantity changes when the annual holding cost rate is changed from I to I
Annual demand 2,400 units Unit price (`) 2.40 Ordering cost (`) 4.00 Storage cost 2% p.a. Interest rate 10% p.a. Lead time ½ month Calculate EOQ, reorder level and total annual inventory cost. How much does the total inventory cost vary if the unit price is changed to $ 5? Typed and correct answer please. I ll rate accordingly.
.. 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…
The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.
A manufacturing company produces two products X and Y. Each product X requires one A and two Bs. Each B requires one C and one D. Each product Y requires 1 C and 4Ds. Table Q5A shows data from the inventory records of components. Table Q5A Data category A B C D Lot - sizing rule Fixed order quantity = 250 Lot for lot Lot for lot Fixed order quantity = 1000 Lead time 3 weeks 2 weeks 1 week 2 weeks Beginning inventory 70 0 200 800 The MPS for products X and Y is given in Table Q5B. The on-hand inventories are as follows: X = 100, Y = 30. The only scheduled receipts are 250 units of X in period 2.The lead times are as follows: X = 2 weeks, Y = 3 weeks. The chase strategy is used for both products. Table Q5B Demand in period Product SS 1 2 3 4 5 6 7 8 X 50 300 200 250 Y 30 400 Required: a) Draw a product structure tree for each product. b) Develop…

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