Consider a hardware supply warehouse that is contractually obligated to deliver 1000 units a specialized fastener to a local manufaturing company each week. Each time the warehouse places an order for these items from its supplier, an ordering and transporation fee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventory value, or $0.25 per year. The warehouse manager would like to know how much to order when inventory gets to zero. Assume that the warehouse works 50 weeks/year.

The following data give monthly Demband >1300 units Ordenng cost Holding lo st to Q - $ 15 pe oder $2/ units peo year 464 Lead time 4 days %3D wha t is the tolal annua / vanable inventory Cost Cie total annus! total aroual ordening) © $968 $ 8 ® $484 D $ I436 14520

1. A local producer of vegetables is deciding how much inventory to have to meet the next week's demand. Vegetable products are perishable with a shelf-life of a week. Based on the historical observations, the company expects the weekly demand to follow a normal distribution with mean 4500 pounds and standard deviation of 400 pounds. The price of the product is $14 per pound in the store, and it costs $6 to produce. If there are any leftovers, the company is required to dispose them safely to avoid any pollution. This process costs $0.5 per pound. Answer the following questions. a) What is the cost of overage per pound? b) What is the cost of underage per pound? c) What is the optimal order quantity?

21- Which one of the following represent FIFO method of inventory evaluation? a. Old items remain in inventory b. Old merchandise is sold first c. New merchandise is sold first d. Average number of goods are sold

At Matthews Car Repair, customer demand for a certain brand of motor oil is normally distributed with a mean of 15 gallons and a standard deviation of 6 work-days. To be 95% sure that Compact Car Repair will not run out of oil, we should reorder when motor oil in stock is less than _______ gallons. a. 24.9 b. 22.6 c. 23.7 d. 20

6. Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant rate of 17,000 units per year. It costs Leaky Pipe $5 to process an order to replenish stock and $2.00 per unit per year to carry the item in stock. Stock is received 12 working days after an order is placed. No backordering is allowed. Assume 365 working days a year. a. Leaky Pipe's optimal order quantity is ______ units. (Enter your response rounded to the nearest whole number.) Part 3 b. The optimal number of orders per year is _____ orders. (Enter your response rounded to the nearest whole number.) Part 4 c. The optimal interval (in working days) between orders is ______ days. (Enter your response rounded to one decimal place.)

A department store uses a (Q, R) policy to control its inventories. Sales of a pocket FM radioaverage 1.4 radios per week. The radio costs the store $50.00, and fixed costs of replenishmentamount to $20.00. Holding costs are based on a 20 percent annual interest charge, and thestore manager estimates a $12.50 cost of lost profit and loss of goodwill if the radio is demanded when out of stock. Reorder lead time is 2 weeks, and statistical studies have shownthat demand over the lead time is accurately described by a Poisson distribution. Find the optimallot sizes and reorder points for this item.

The local supermarket buys lettuce each day to ensure really fresh produce. Each morning, any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week, the supermarket can buy fresh lettuce for $8.00 a box. The lettuce is sold for $16.00 a box and the dealer that sells old lettuce is willing to pay $1.80 a box. Past history says that tomorrow's demand for lettuce averages 245 boxes with a standard deviation of 38 boxes. How many boxes of lettuce should the supermarket purchase tomorrow? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round your answer to the nearest whole number.) Number of boxes

Define each of the following in your own words and as a formula:a. Annual ordering cost.b. Annual carrying cost.c. Total annual cost.