Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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- IV. Owry Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 500 units, and this is constant throughout the year. Carrying cost is estimated to be P2 per unit per year, and the ordering cost is P40 per order. a. To minimize cost, how many units should be ordered each time an order is placed? b. How many orders per year are needed with the optimal policy? c. What is the average inventory is costs are minimized?arrow_forwardSuzuki is a company that manufactures motorcycles. It produces 450 motorcycles a month. It buys tyres for motorcycles from Dunlop at a cost of $20 per tyre. The company’s inventory carrying cost per tyre is estimated to be 15% of the cost per tyre. The cost per order is calculated at 250% of the cost per tyre. Rquirement: i) Calculate the EOQ. ii) Determine the number of orders per year? iii) Compute the total cost.arrow_forward1. Maxmin Trading Company buys 1,000 pcs of chair per month. The cost per chair is Php500 and ordering cost is Php400. The inventory carrying cost is estimated at 10% of the price of the chair. Determine the EOQ.arrow_forward
- Answer all sub part questions.arrow_forwardBased on the records of ABC company, the annual demand for item HP26 has annual demand of 6,582 units. The ordering cost per order is PhP105, and the holding per unit per year cost is PhP136. a. What is the Economic order quantity?b. What is number of times the company will order?c. What is the annual carrying cost?d. What is the annual ordering cost?e. What is the total inventory costs incurred at EOQ?arrow_forward10.4 A company wishes to establish an EOQ for an item for which the annual demand is $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%. Calculate the following: a. The EOQ in dollars. b. Number of orders per year. c. Cost of ordering, cost of carrying inventory, and total cost. d. Compare your answers to those in problem 10.3.arrow_forward
- Given the following information for a purchased component, what is the total annual cost for the item? Annual demand = 500,000 Purchase price = $10 per unit Order quantity 100,000 • Order cost = $5 per order • Annual holding cost per unit = = $2 . $2.510,100 O $510,025 $510,250 O $5,100,250 O $5,100,025arrow_forwardPlease do not give solution in image format thanku Carousel Restaurant in Coquitlam is using perpetual inventory control method. Determine the reorder quantity of chickpeas cans if the par stock is 25 cans, delivery takes 5 days, the daily usage is 2 cans and the desired safety factor is 1.5 a. 10 b. 20 c. 25 d. 15arrow_forwardsniparrow_forward
- 03) Halifax Souvenir Company currently orders 500 units four times each year. Each order costs $12 and each unit costs $1.20 per year to carry. On average, it takes 5 days to receive an order from the supplier. The company operates 250 days per year. Required: 1. What is the EOQ? 2. Calculate total annual inventory cost under EOQ. 3. What is the current inventory cost? 4. What is the re-order point?arrow_forwardB). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?arrow_forwardThe 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.arrow_forward
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