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 you took advantage of this price break, how much would you save annually? (Round your answer to 2 decimal places.) Annual savings $
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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 you took advantage of this price break, how much would you save annually? (Round your answer to 2 decimal places.)
| Annual savings | $ |
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