36. The president of Value Filters became very enthusiastic about using EOQS to plan the sizes of her production runs, and instituted lot sizing based on EOQ values before she could properly estimate costs. For one particular filter line, which had an annual de- mand of 1,800 units per year and which was valued at $2.40 per unit, she assumed a holding cost based on a 30 percent annual interest rate and a setup cost of $100. Some time later, after the cost accounting department had time to perform an analysis, it found that the appropriate value of the interest rate was closer to 20 percent and the setup cost was about $40. What was the additional average annual cost of holding and setup incurred from the use of the wrong costs?

Prob 4: Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside's generator production operation will require 2000 components per month throughout the year (24,000 units annually). Assume that the ordering costs are $20 per order, the unit cost is $2.50 per component, and annual holding costs are 25% of the value of the inventory. Westside has 250 working days per year and a lead time of 4 days. Current production line has an annual capacity of 30,000 units. Answer the following inventory policy questions: a. Rewrite the inputs using standard notations (D, Co, Ch, ... ) b. What is the reorder point? c. What is the cycle time? d. What are the optimal order quantity and the total annual cost? e. Calculate the optimal production lot size.

Hi, I need assistance with this OM problem. Thank you!

Your supplier gives you a quantity discount if you buy at least 500 units at a time, a price of $4.90. Your ordering cost is $30, and the interest rate is 22% of the unit cost. Annual demand is 2,000, so the EOQ is 334. Calculate the total costs (consisting of holding, ordering, and cost of goods), assuming that you buy at least enough to get the quantity discount.

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