A car rental agency uses 96 boxes of staples a The boxes cost $4 each. It costs $10 to order staples, and carrying costs are $0.80 per box on an annual basis. Determine: the order quantity that will minimize the sum of ordering and holding boxes of staples the annual cost of ordering and carrying the boxes of staples
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- A car rental agency uses 96 boxes of staples a The boxes cost $4 each. It costs $10 to order staples, and carrying costs are $0.80 per box on an annual basis.
Determine:
- the order quantity that will minimize the sum of ordering and holding boxes of staples
- the annual cost of ordering and carrying the boxes of staples
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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.Thompson Paint Company uses 60,000 gallons of pigment per year. The cost of ordering pigment is $200 per order, and the cost of carrying the pigment in inventory is $1 per gallon per year. The firm uses pigment at a constant rate every day throughout the year. a. Calculate the EOQ. b. If it takes 20 days to receive an order once it has been placed, determine the reorder point in terms of gallons of pigment. (Note: Use a 365-day year.)Explain the difference between static and dynamic inventory models?
- EOQ, reorder point, and safety stock Alexis Company uses 916 units of a product per year on a continuous basis. The product has a fixed cost of $60 per order, and its carrying cost is $3 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. a. Alexis' EOQ is units. (Round to the nearest whole number.)The Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The reorder pointFloral Beauty, Inc., is a large floral arrangements store located in Asheville Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $19 each. There is an annual demand for 22,000 Bridal Lilies. The manager of Floral Beauty has determined that the ordering cost is $85 per order, and the carrying cost, as a percentage of the unit cost, is 14%. Floral Beauty is now considering a new supplier of Bridal Lilies. Each lily would cost only $17.50, but to get this discount, Floral Beauty would have to buy shipments of 2,000 Bridal Lilies at a time. Should Floral Beauty use the new supplier and take this discount for quantity buying? d) What is the total annual inventory cost (including purchase cost) for the current supplier? e) What is the annual holding cost for the new supplier (when purchasing 2,000 each order)? f) What is the total annual inventory cost (including purchase cost) for the new supplier (when I Need help on the formulas…
- Floral Beauty, Inc., is a large floral arrangements store located in Asheville Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $19 each. There is an annual demand for 22,000 Bridal Lilies. The manager of Floral Beauty has determined that the ordering cost is $85 per order, and the carrying cost, as a percentage of the unit cost, is 14%. Floral Beauty is now considering a new supplier of Bridal Lilies. Each lily would cost only $17.50, but to get this discount, Floral Beauty would have to buy shipments of 2,000 Bridal Lilies at a time. Should Floral Beauty use the new supplier and take this discount for quantity buying? d) What is the total annual inventory cost (including purchase cost) for the current supplier? e) What is the annual holding cost for the new supplier (when purchasing 2,000 each order)? f) What is the total annual inventory cost (including purchase cost) for the new supplier (when I Need help on the formulas…Kabel Market store sells electric cable. The demand for cable is normally distributed. The inventory related information at Kabel Market is as follows: Average Annual Demand = 16,900 meters Standard deviation of weekly demand = 28 meters Cable selling price = AMD 640.00 per meter Ordering cost = AMD 1,250.00 per order Lead time = 5 weeks Annual inventory-holding cost estimate = 2.5% of the cable selling price Required service level = 95% Kabel Market works 52 weeks a year. Note: The approximate z values are: for 0.9 ≈ 1.28, for 0.92 ≈ 1.405, for 0.95 ≈ 1.645, for 0.98 ≈ 2.05. Suppose the bar management practices the fixed-QUANTITY ordering system with the use of the economic order quantity. Answer the following questions: (i) How many meters of cable they order from the supplier each time? (ii) When do they place an order? (iii) What is the safety stock?Describe what is ABC classifications in inventory management?
- The annual demand for an item is 12 000 units. Ordering cost is $80 per order and carrying cost is 20% of the unit cost of $15. Calculate: The Economic order quantity Annual ordering cost Annual carrying cost Total annual costStationery Supplies orders plastic erasers from a company in Nürnberg, Germany.It takes six weeks to ship the erasers from Germany to Utah. Stationery Suppliesmaintains a standing order of 200 erasers every six months (shipped on the first ofJanuary and the first of July).a. Assuming the ordering policy the store is using does not result in large buildupsof inventory or long-term stock-outs, what is the annual demand for erasers?b. Draw a graph of the pipeline inventory (that is, the inventory ordered but notreceived) of the erasers during one year. What is the average pipeline inventoryof erasers during the year?EOQ, reorder point, and safety stock Alexis Company uses 937units of a product per year on a continuous basis. The product has a fixed cost of $44 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity.