Use the information in Scenario 9.15. What is the target inventory level needed to achieve a 90% service level? greater than 1000 units but less than or equal to 1250 units less than or equal to 1000 units greater than 1500 units greater than 1250 units but less than or equal to 1500 units
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- Machine Operator, manufacturer of shelving keeps stock of a wide range of components. The following data, you have established that: The cost to hold one unit for one year is $1.60. The cost of placing an order is $70.00. Lead Time: The supplier takes from one to two weeks to deliver goods ordered. Maximum 2 Weeks Minimum 1 Week The annual demand is 50,000 units Maximum usage5,000 usage Minimum usage 2,000 units Required: (a) On the basis of the above information, calculate for component B: (i) The minimum stock level (ii) The reorder level (iii) The EOQ (iv) The maximum stock levelETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation3. PHL assembles security monitors. It purchases 900 black-and-white cathode ray tubes per month at $80 each. Ordering costs are $120, and annual carrying costs are $20 per unit. - a) Determine the economic order quantity (2 points) - b) Find number of orders per year (1 point) - c) If the supplier offer a price of $79.5 per tube for ordering 1200 tubes in a lot, would you evaluate and advise PHL to take advantage of the offer? (2 points)
- Answer all subparts a to f.if answered within 30mins,it would be helpful Accounting ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situationA hardware store sells paint that has a demand of 9,706 gallons per year. The store purchases the paint from a supplier for 11.2 dollars per gallon The unit holding cost per year is 24 percent of the unit purchase cost. while the ordering cost is 175 dollars per order. The paint supplier has a lead time of 10 days. What is the annual ordering cost if the store uses the order quantity of 2,103 gallons per order? Assume EOQ model is appropriate. Use at least 4 decimal places.Your firm sells high-end road and mountain bikes and related accessories. The following information is available to estimate customer lifetime value for a new customer: Average order: $ 510 Frequency of orders: 1.9 /year Average margin: 60 % markup on retail Customer retention rate: 62 % Promotional/communication costs/yr $ 38 Your discount rate: 10 % Customer acquisition cost $ 145 What is the maximum amount your firm can afford to spend to increase customer retention from 62 % to 81 %? Report your answer rounded to the nearest dollar. To answer the question, calculate CLV at the higher retention rate and subtract the CLV at the lower retention rate. The difference will be the maximum amount the company can afford to spend to increase customer retention.
- DETERMINING DAILY COST OF HOLDING A shipment of new connectors for semiconductors needs to go from San Jose to Singapore for assembly.The value of the connectors is $1,750, and holding cost is 40% per year. One airfreight carrier can ship theconnectors 1 day faster than its competitor, at an extra cost of $20.00. Which carrier should be selected?APPROACH c First we determine the daily holding cost and then compare the daily holding cost withthe cost of faster shipment.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 $20 to place an order (managerial and clerical costs). The supplier currently orders 100 batteries per month. What is the economic order quantity? Based on your answer above, how many orders will be placed per year using the EOQ? Determine the ordering, handling, and total inventory costs for the EOQ. Determine the effective annualized cost of financing for the following credit terms, assuming that (1) discounts are not taken, (2) accounts are paid at the end of the credit period, and (3) use 365=day year: a. 1/10, n/30; b. 3/10, n/30; c. 3/10, n/60; d. 2/10, n/90Ceso Corporation manufactures and sells custom snowmobiles. From the time an order is placed till the time the snowmobile reaches the customer averages 50 days. This 50 days is spent as follows: Wait time: 10 days Move time: 5 days Process time: 15 days Queue time: 15 days Inspection time: 5 days What is it's manufacturing cycle efficiency (MCE) for its snowmobiles? 30.0% 37.5% 40.0% 60.0%
- solve a,b and c please. Mcleavey Manufacturing has a demand for 1,000 pumps each year. The company outsources her production by ordering outside supplier, unit purchase price is 60$/ unit. Mc Leavey Manufacturing has to rent warehouse 10% of unit cost per year. And Mc Leavey Manufacturing pays for investment cost of 10% of unit cost per year. For ordering, the company must pay 50$/ order. a. What do you recommend if Mc Leavey Manufacturing get discount from his vendor with below schemes: Order quantity: discount price Less than 150 pumps: 5% discount rate More than 150 pumps: 10% discount rate b. If the company has plan to produce by themself then what is optimal production quantity? (given that they have production rate is 1500 units/year and setup cost is 100$). c. What is the optimal total annual inventory cost if they produce?PLEASE MAKE IT IN EXCEL AND SHOW THE FORMULAS Comercial El Suspiro, S.A., purchases 2'100,000 units per year of a component. The cost of each order is $25.00. The annual unit maintenance cost is 27% of its cost of $2.00. On a 360-day basis, calculate the reorder point, knowing that it takes 10.5 days for the supplier to put in the LAB company the goods, and the company sorts and stores them in 1.5 days, calculate the reorder point.Collyer Products Inc. has a Valve Division that manufactures and sells a standard valve as follows: Capacity in units 10,000 Selling price to outside customers on the intermediate market $ 15 Variable costs per unit $ 8 Fixed costs per unit (based on capacity) $ 5 The company has a Pump Division that could use this valve in the manufacture of one of its pumps. The Pump Division is currently purchasing 10,000 valves per year from an overseas supplier at a cost of $14 per valve. Required:1. Assume that the Valve Division has ample idle capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? 2. Assume that the Valve Division is selling all that it can produce to outside customers on the intermediate market. What is the minimum transfer price acceptable to the Valve Division for transfers to the Pump Division? 3. Assume again that the Valve Division is selling all that it can…