
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Computers lose value as they are stored in inventory. This is an example of which
component of a firm’s inventory holding cost?
a. Opportunity cost of capital
b. Storage cost
c. Spoilage cost
d. Obsolescence cost
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- Coca Cola in Turkey manages its products' inventory at Shell gas stations, that is Coca Cola, decides replenishment time and the order quantities for all its products. Shell sends real-time sales data of Coca Cola products at its gas station stores and as part of this agreement Coca Cola gives a certain percentage discount in the prices it charges to Shell. Based on what we learned in class, choose the correct statement(s): O a. Because Shell owns the stores it is more likely to make better forecasts of the demand for Coca Cola products Ob. This agreement is a strategy to reduce the bullwhip effect Oc. The main purpose of VMI is to reduce lead time in supply chains O d. This is known as vendor-managed inventory (VMI)arrow_forwardA computer company's yearly inventory cost is 39 percent (which accounts for the cost of capital for financing the inventory, warehouse space, and the cost of obsolescence). Last year, the company had $375 million in inventory and cost of goods sold of $29 billion.What is the company's total inventory cost for the year (in million $s)? Note: Round your answer to the nearest integer.arrow_forwardI 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 $819, 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)arrow_forward
- A company purchases wood for use in its products. The firm uses 760 pounds of wood per week and purchases wood for $1.75 per pound from a supplier. Each time the firm orders wood from the supplier, the firm must pay a $75 order processing charge. The firm's annual holding cost percentage is 31%. Do not round intermediate calculations. Assume there are 52 weeks in a year and round your answer to two decimal places. If the company orders 3,000 pounds of wood with each order, what is the sum of the annual holding and ordering costs? dollarsarrow_forwardYou have been hired to help a factory that produces nails. The factory can produce nails at a rate of 20,000 per hour and the factory runs 7 hours a day for 250 days per yéar. The annual demand for the nails is 2,800,000. It costs $100 to set up production runs for the nails. Each nail costs $0.03 to produce. The annual inventory holding costs are $0.02 for one nail. Please answer the following: (a) ignoring the production rate when determining the optimal order quantity. In other words, the manager wants to order an integer amount of nails according to the EOQ framework. Determine the amount of nails the manager orders to be produced at a time. (b) Determine the integer amount to order according to the POQ framework, the max inventory level according to this policy, the cycle time, and the amount of time spent in the 'production phase' during each cycle. (c) ordering the optimal level in (b) instead of (a). Note that although the manager ignores the production rate in (a), costs are…arrow_forwardsolve for C Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
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