A company uses 5000 items per annum which has a price of $2 each. The ordering costs are $150 per order and holding costs are $1.50 per item per annum. (a). Calculate the EOQ (b). Using the EOQ as the number of items ordered, calculate the number of orders per annum, average stock, . annual stock hold
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A company uses 5000 items per annum which has a price of $2 each. The ordering costs are $150 per order and holding costs are $1.50 per item per annum.
(a). Calculate the EOQ
(b). Using the EOQ as the number of items ordered, calculate the number of orders per annum, average stock, . annual stock holding cost, annual order cost, total annual inventory cost and total annual cost of items and inventory.
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- Please show work so I can understand it. A company decides to establish an EOQ for an item. The annual demand is 200,000 units. The ordering costs are $40 per order, and inventory-carrying costs are $16 per unit per year. Calculate the following: (a). The EOQ in units. (b). Number of orders per year. (c). Annual ordering cost, annual holding cost, and annual total costTax Preparers, Inc. works 250 days per year. Th e companyuses adding machine tape at a rate of eight rolls per day. Usageis believed to be normally distributed with a standard deviationof three rolls during lead time. Th e cost of ordering the tape is$10, and holding costs are $0.30 per roll per year. Lead time istwo days.(a) Calculate the economic order quantity.(b) What reorder point will provide an order-cycle servicelevel of 97 percent?(c) How much safety stock must the company hold to have a97 percent order-cycle service level?(d) What reorder point is needed to provide an order-cycleservice level of 99 percent?(e) How much safety stock must the company hold to have a99 percent order-cycle service level?Each year, Y Company purchases 20,000 units of an item that costs $640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is $150. Determine the EOQ. What is the average inventory level, assuming that the minimum inventory level is zero Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.
- The sales of Whole Care mouthwash at Jen's of Michigan over the past six months have averaged 2,000 cases per month, which is the current order quantity. Jen's of Michigan's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions What is EOQ? What is the cost reduction? What is the reorder point? What is Time between Orders (TBO)?Al Fursan Inc. needs 300 kgs of a material per month (four weeks). It costs RO 10 to make and receive an order, and it takes 16 work days to receive it. The annual holding cost is 15% of purchase price. The price RO 1 per kg. The company is operating 6 days per week. What is the minimum annual total holding and ordering cost? Round-up to the nearest integer Select one: a. 100 b. 104 47 c. 69 d. 152New Wave Shelving’s Inventory Manager would like to startusing an ABC inventory classification system. The followingtable shows the annual inventory usage of all the 19 compo-nent items that the company holds. Assign them to theirappropriate category.
- 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.)(a) Ignoring taxation, calculate the optimum order level of inventory over a one-year planning period using the EOQ model. (b) Estimate the level of safety inventory that should be carried by Toyzrfun Ltd. (c) If Toyzrfun Ltd were to be offered a quantity discount by its suppliers of 1% for orders of 30 000 units or more, evaluate whether it would be beneficial for the company to take advantage of the quantity discount. Assume for this calculation that no safety inventory is carried. (d) Estimate the expected total annual costs of inventory management if the EOQ had been (i) 50% higher, and (ii) 50% lower than its actual level. Comment upon the sensitivity of total annual costs to changes in the EOQ.The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?
- Solve the following EOQ model problems: 1. Each The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. year, Y Company purchases 20,000 units of an item that costs P 640 per unit. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.Solve the following EOQ model problems:1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150.a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero?c. Determine the total annual ordering cost and the total annual holding cost forthe item if the EOQ is used.2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week.a. Find the EOQ.b. Find the reorder point.c. What would be your ordering policy for this item?d. Find the total annual cost of ordering and carrying silicon chips.3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a…Assume that JAO, Inc., a manufacturer of electronic test equipment, uses 14,400 units of an item annually. Its order cost is P500 per order, and the carrying cost is P10 per unit per year. It requires 10 days to place and receive an order. 1. The ordering costs is 5,696 4,026 6,000 4,8002. The inventory costs is 6,000 12,000 9,600 8,052