An electronics shop sells 6000 headphones in a year and the sales is relatively constant throughout the year. These headphones are purchased for SR 20.00 each, and the lead time is three days. The holding cost per headphone per year is 10% of the unit cost and the ordering cost per order is SR 75. There are 300 working days per year. Calculate the following: (i) What is the annual holding cost? (ii) In minimizing the cost, how many orders would be made each year? (iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)? (iv) What is the time between orders? (v) What is the ROP? Write the answer on the computer

An electronics shop sells 6000 headphones in a year and the sales is relatively constant throughout the year. These headphones are purchased for SR 20.00 each, and the lead time is three days. The holding cost per headphone per year is 10% of the unit cost and the ordering cost per order is SR 75. There are 300 working days per year. Calculate the following: (i) What is the annual holding cost? (ii) In minimizing the cost, how many orders would be made each year? (iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)? (iv) What is the time between orders? (v) What is the ROP? Write the answer on the computer

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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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.
1. A local retailer anticipates an annual demand 15000 units of a product. The retailers] allows shortages for that product, and these shortages are backordered at a rate of 4 OMR per unit backordered. The cost of ordering is 200 OMR, whereas, the annual holding cost is 1OMR per unit. The retailer operates 300 days per year. What is the minimum total inventory cost in OMR? Round-up to the nearest integer?? a. 1960 O b. 2191 C. 1789 d. 1898 e. 1550 O f. None is correct
Demand for your product averages 10,000 units per year. Placing an order costs $500. The holding cost per unit per year is 15% of the cost of the item, and items cost $6.00. What is the EOQ?
You are in charge of inventory control of a highly successful product retailed by your firm. Weekly demand for this item varies, with an average of 350 units and a standard deviation of 15 units. It is purchased from a wholesaler at a cost of $25.00 per unit. The supply lead time is 7 weeks. Placing an order costs $55.00, and the inventory carrying rate per year is 15 percent of the item's cost. Your firm operates 6 days per week, 50 weeks per year. Refer to the standard normal table The table below shows the total area under the normal curve for a point that is Z standard deviations to the right of the mean. Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359 0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5754 0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141…
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 cost
Do you think the safety stock (safety inventory) could be negative? What is the meaning of a negative safety inventory (hint: safety stock is the difference between the optimal inventory and the average demand)?
Demand for a popular athletic shoe is nearly constant at 1000 pairs per year for a regional division of a national retailer (open every day, working days=365). The cost per pair is $54. It costs $72 to place an order, and annual holding costs are charged at 22% of the cost per unit. The lead time is two weeks (14 days). Show steps to find: a.What is the EOQ? b.What is the reorder point? c.How many orders per year?d.What is the total annual cost?
DB sells 500 bottles of supplements per week at $ 75 per bottle. DB's supplier charges DB $ 20 per order and $ 40 per bottle. DB's annual holding cost percentage is 30 % of unit cost. DB operates 50 weeks in a year. What is DB's total annual ordering and holding cost if DB orders 200 bottles at a time ? Show all formulas used, calculations and results.
40) PLEASE HELP WITH THIS! Gentle Ben's Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and Is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to arrive. Weekly demand is 100 bottles (closed two weeks per year) with a standard devlation of 30 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability. b. At what inventory level should he place an order? Note: Use Excel's NORM.S.IN( function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number.
7. Alocal retailer anticipates an annual demand 12000 units of a product. The retailers allows shortages for that product, and these shortages are backordered at a rate of 2 OMR per unit backordered. The cost of ordering is 200 OMR, whereas , the annual holding cost is 1 OMR per unit. The retailer operates 300 days per year. What is the minimum total inventory cost in OMR? Round -up to the nearest integer a. 1998 b. 1550 c. 1789 d. None is correct e. 2000 f. 1987 g. 1898
I need answers A company uses on an average 216 parts a day with a standard deviation of 16 parts per day in a manufacturing process. Cost of placing and receiving an ordering is BDT 40,000. Estimated monthly carrying cost is BDT 90 per part. Orders are delivered approximately 7 days after being placed. The delivery time is normal with a mean of 7 days and a standard deviation of 2 days. The company is open 360 days per year. Find the order quantity that is economical. If the Company takes 3% stock out risk, then find safety stock (SS) quantity and Re-Order Point? 3.If the supplier offers a discount of BDT 8 per circuit board for purchasing of 4000 boards at a time, then financially evaluate and justify whether the company will go with the offer or not? 4.The person who orders the boards follows this rule: Order when the amount on…
As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost, expressed as a percentage of average inventory value, is 20 percent. Your supplier has provided the following price schedule:Minimum Order Quantity Price per Unit1 $2.50200 $2.40300 $2.251,000 $2.00What ordering policy do you recommend?