Michael's Mechanical sells 6,000 jettison machines annually. Each machine costs Michael's $2,000 to purchase, inventory carrying costs are 36 percent of the purchase price, and the cost of placing an order with its supplier is $150. What is the EOQ? Round your answer to the nearest whole number. machines What is the total inventory cost at the EOQ level? Do not round intermediate calculations. Round your answer to the nearest dollar. $
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Michael's Mechanical sells 6,000 jettison machines annually. Each machine costs Michael's $2,000 to purchase, inventory carrying costs are 36 percent of the purchase price, and the cost of placing an order with its supplier is $150.
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What is the EOQ? Round your answer to the nearest whole number.
machines
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What is the total inventory cost at the EOQ level? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
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- The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.A wholesale store buys 500 of their most popular coffee mugs each month. The cost of orderingand receiving shipments is $12 per order. Accounting estimates annual carrying costs are $3.60.The supplier lead time is 2 operating days. The store operates 240 days per year. Each order isreceived from the supplier in a single delivery. There are no quantity discounts.Use 2 decimal places in your calculations (if needed) and then round your final answer to theclosest whole number.a. What quantity should the store order with each order?(show your work in the space below)b. How many times per year will the store order?(show your work in the space below)c. How many days will elapse between two consecutive orders?(show your work in the space below)d. What is the reorder point if the company wishes to carry a safety stock of 10 mugs?(show your work in the space below)e. What is the store’s total annual cost of placing orders & carrying inventory?(show your work in the space below)Joe Henry's machine shop uses 2,530 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,530 Holding cost per bracket per year $1.65 Order cost per order $18.25 Lead time 2 days Working days per year 250 Part 2 a) What is the EOQ? enter your response here units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? enter your response here units (round your response to two decimal places). What would be the annual inventory holding cost? $enter your response here (round your response to two decimal places). Part 4 c) Given the EOQ, how many orders will be made annually? enter your response here orders (round your response to two decimal places). What would be the annual order cost? $enter your response here (round…
- Calculate total annual cost for the alternative suppliers for aproduct with following characteristics: montly demand; mean: 5000, standard deviation 2000 Holding cost: 30% Cycle service level: 98% Using EOQ formula, find the lot size. Don’t forget to add ordering cost to the total cost! Supplier 1 Supplier 2 Supplier 3 Ordering Cost(per order ) 1000 2000 5000 Cost 10 9 8 Average Lead Time ( month ) 0.5 2 2 Lead time std deviation ( month ) 0.5 1 2Explain how inventory affects product improvement, quality, prices, and the ability to respondquickly to the marketplace.MAY I ASK FOR THE SOLUTIONS AND ANSWERS OF NOS. 12 to 17 (kindly refer to the table) Thank you! ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (A) Reorder Point 1. What should be the reorder point in boxes? 2. How much would the normal lead time usage be? 3. How much should ABC keep as safety stock? (B) Economic Order Quantity 4. What is the annual demand for the boxes of candles? 5. How much is the…
- At theEOQ, what is the firm’s total inventory costper year, assuming safety stock = 15 units?DAT, Inc. produces digital audiotapes to be used in the consumer audio division. DAT lacks sufficient personnel in its inventory supply section to closely control each item stocked, so it has asked you to determine an ABC classification. Here is a sample from the inventory records: ITEM AVERAGEMONTHLY DEMAND PRICE PER UNIT 1 700 $ 6.00 2 200 4.00 3 2,000 12.00 4 1,100 20.00 5 4,000 21.00 6 100 10.00 7 3,000 2.00 8 2,500 1.00 9 500 10.00 10 1,000 2.00 Develop an ABC classification for these 10 items. Item Monthly Usage ($) Class 1 2 3 4 5 6 7 8 9 10A produce distributor uses 720 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.) Savings$ ____per year
- Joe Henry's machine shop uses 2,450 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: Annual demand 2,450 Holding cost per bracket per year $1.65 Order cost per order $18.50 Lead time 2 days Working days per year 250 a) What is the EOQ? __units (round your response to two decimal places). b) What is the average inventory if the EOQ is used?__ units (round your response to two decimal places). What would be the annual inventory holding cost? $__ (round your response to two decimal places). c) Given the EOQ, how many orders will be made annually?__orders (round your response to two decimal places). What would be the annual order cost? $__ (round your response to two decimal places). d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? __ $ (round your response to two decimal places). d)…Suppose you are the assistant controller for a retail establishment that is an independent bookseller. The company uses manual, periodic inventory updating, using physical counts at year end, and the FIFO method for inventory costing. Present a persuasive argument for the benefits of the company to switch to perpetual inventory updating method?Daily demand for product sample kits is normally distributed with a mean of 35 units and a standard deviation of 4. Supply is virtually certain with a lead time of 9 days. The cost of placing an order is $20, and annual carrying costs for one kit is 25 percent. The price of one kit is $12.50. Assume a year has 365 days.If a 99% service level is desired, what is average inventory on hand? If demand had no variation, what would the reorder point be?