Henderson Furniture sells reproductions of 18th-century furniture. For a particular table, the assumptions of the inventory model with backorders are valid.Annual Demand: D = 200 tables per yearInventory holding cost (as a percent of the item cost): 1 = 25% per yearItem cost: C = $800 per tableOrdering cost: Co = $80 per orderBackordering cost: Cb = $50 per table per yearThe store is open 250 days a year.What is the economic order quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number.○ A. 28B. 5○ C. 13OD. 23E. 14QUESTION 4What is the backorder quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number.○ A. 14B. 23C. 13OD. 28○ E. 5

Given information is:Annual Demand(D): 200 tablesInventory Holding Cost per year(H): 25% of Item…

Answered: Henderson Furniture sells reproductions…

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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Similar questions

Suppose demand is know and constant at 500 units per year (one year has 250 working days). The holding cost is $2 per unit per year and the ordering cost is $20 per order. Also assume that the lead time is 10 days. Compute the optimal order quantity (EOQ) and the optimal annual inventory cost. Draw a picture of the evolution of the inventory level with time. Indicate the ROP on the picture as well as the length of the cycle. Now assume that the lead time is 90 days. Indicate the ROP on the picture.
A company has the demand of 1800 units per year (demand rate is constant), holding costs of $13 per unit and setup costs (ordering cost) of $27 per order. The order lead time is 1 days, and the company operates 245 days every year. To avoid a stockout, they need to place an order at least ______ days before the inventory runs out.
Example 2: The Gulf Paper Company produces paper from wood pulp ordered from a lumber products firm. The paper company's daily demand for wood pulp is a constant 8,000 Kgs. Lead time is normally distributed, with an average of 7 days and a standard deviation of 1.6 days. The Company wishes to maintain a 90% service level. 1. What size of safety stock should the company keep ? 2. What is the reorder point? What would be the reorder point if the company want to limit the probability of a stockout and work stoppage to 2%. 3.
3. Skinner’s Fish Market buys fresh Boston bluefish daily for $4.20 per pound and sells it for $6 per pound. At the end of each business day, any remaining bluefish is sold to a producer of cat food for $3 per pound. Daily demand can be approximated by a normal distribution with a mean of 64 pounds and a standard deviation of 11 pounds. What is the optimal order quantity (stocking level)? Round your answer to 2 decimal places. Answer:_______
The demand for a commodity is 40,000 units a year, at a steady rate. It costs $20 to place an order, and $0.40 to hold a unit for a year. Find the order size to minimize inventory costs, the number of orders placed each year, the length of the inventory cycle and the total costs of holding inventory for the year. What is the EOQ? What is the number of orders placed each year? What is the inventory cycle (length of time that the the order size will last)? in terms of weeks What is the total ordering & carrying costs at the EOQ level?
Using the fixed-order-quantity model, which of the following is the total ordering cost of inventory given an annual demand of 25,000 units, a cost per order of $80, and a holding cost per unit per year of $16?
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)
Economic Order Quantity (EOQ) is a method used to calculate the ideal quantity to order. The underlying concepts of EOQ is the balance between ordering cost and holding cost. Q1. Using the data points given below, perform two calculations: Q2. Use an excel file to calculate the EOQ order. Make sure to use the formula bar to create the EQO formula. Make an excel file similar to the image attached. A = annual demand = 20,000 Cp = Cost of an order which includes preparing and following up the order = $100.00 Ch = Unit inventory cost per year or item cost (P) $100 times annual carrying cost rate (r) (25%)
Peter operates an ice cream shop and needs to order milk from a dairy supplier. The average daily milk consumption is 9 gallons, and the standard deviation is 2 gallons. The delivery time is 3 days on average, with a standard deviation = 1 day. Peter can place an order at any time, and he decides the order quantity = 100 gallons. What is the reorder point if he wants to keep the 95% service level?
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