An automotive supply store sells aproduct that has a demand of 400units per month. Its supplier chargesan ordering cost of $60 per orderand $25 per unit with a 20%discount for orders of 250 units orhigher. The store incurs a 20%annual holding cost. What is thestore's annual holding cost if itorders at a quantity of 300 units?Please give solution in correct and stepby step detailed format thankuDon't give solution in image format

The cost of maintaining or storing inventory over the course of a year is represented by the annual…

Answered: An automotive supply store sells a…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Joe needs to purchase malt for his microbrew production. His supplier charges $35 per delivery (no matter how much is delivered) and $1.20 per gallon. Joe's annual holding cost per unit is 35% of the dollar value of the unit. Joe uses 5,000 gallons of malt per week.Suppose Joe were to order 3,800 gallons each time he orders. How many orders per year would he place on average? _______ orders per year. Provide the answer using 2 decimal places.
Johnson Tire Plaza (JTP) is a large chain of tire shops, who sells various brand of automobile tires. The yearly demand of a particular brand of time is about 8,888 units per year. JTP purchases these tires from a supplier. The ordering cost is $124 per order and the holding cost is $19 per tire per year. The supplier always deliver the shipment within 6 days after receiving a replenishment order from JTP. The company operates 250 days per year. Assume EOQ model is applicable. What is the optimal annual inventory cost for JTP? Use at least 4 decimal places.
Company C&A sells 600 bottles of a dietary supplement per week at $100 per bottle. The supplement is ordered from a supplier who charges Company C&A $30 per order and $50 per bottle. Company C&A’s annual holding cost percentage is 40%. Assume Company C&A operates 50 weeks in a year. What should C&A’s EOQ for this item be? What is C&A’s total annual cost using this EOQ?
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Consider the company in Question 1. Now the company is considering working with a local supplier. Since the local supplier is located close to the company, there is no restriction on the frequency of the orders. The purchasing cost from this local supplier is $80 per unit. Every time they place an order there is a fixed shipping cost of $12. Holding cost is again based on 20% annual interest rate. Calculate the economic order quantity. Calculate the total annual cost the company will incur with this supplier if they use the order quantity you found in (a) (Total Annual Cost = Annual Ordering Cost + Annual Inventory Holding Cost + Annual Purchasing Cost) The company is also considering producing the product at home. The production rate is 12000 units per year. They estimate that the setup cost is $20 per setup. The production cost is $60 per unit. The holding cost is based on the annual interest rate and the production cost of the product. Calculate the economic production quantity. How…
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I run a Ford car dealership, and I experience known and constant demand for cars. I sell 10,000 cars annually. The cost of ordering is $1,108, and the annual cost of holding a car on the lot is $500. What is the economic ordering quantity (EOQ)? Round to the nearest whole number (so if your answer is 443.363, round to 443)
An engineer has decided to pursue ordering option for a particular item on an as needed basis as oppose to stocking it. To stock the item, inventory inspection costs $500 annually. The cost to place an order is estimated at $125. For the ordering option, there is an additional $85 special delivery charge per order. Demand for the $20 item is 2,300 units per year. The annual holding cost rate is 40% of the item price. Calculate range of the order quantity that will make it economical to order this item every time. If the engineer decides to stock the item what is the order quantity that is economical.
An electronic store uses continuous review policy to manage the inventory of its high selling monitor model. The monitor has the following characteristics. The annual demand for the monitor is (4000 *2) units per week. The monitors are bought from an offshore supplier at a unit price of 7000 AED per unit and each order costs 80000 AED. The holding cost of laptops is 25% of the value of the product. Calculate the annual demand using the no 2 What is the economic order quantity? EOQ? What would be the average number of orders in a week? What would be the average time between orders (in weeks)? What would be the average inventory level? The electronic store is considering a local supplier. The ordering cost of the new supplier is 65000 AED however the unit price of the monitor is 9000 AED. Should the electronic store change its supplier?
HairGlow uses a chemical in the production of one of its hair products at a rate of 1,000 litres per year. The cost of placing an order and of receiving the chemical once it arrives in the warehouse is Ksh 30 and Ksh 70 respectively. The chemical is purchased at Ksh 20 per litre. Holding costs per year for a litre of the chemical is considered to be 15 percent of its cost. Find the optimal order size
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.
ABC Corporation resells one product to a small isolated community. It has 365 working days. It sells an average of 50 sacks, but may sell as low as 10 sacks and as high as 65 sacks each day. The supplier charges 500 per sack and an additional fixed cost of 1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity at a weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that ABC would incur if it applies the reorder point and EOQ models?

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