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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At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to replenish stock is $75, and the annual cost of holding is $6.00 per book. Stock is received 6 working days after an order has been placed. No backorder is allowed. Assume 250 working days a year. **(Enter your response rounded to the nearest whole number.)** Dot Com's optimal order quantity is ______ books. What is the optimal number of orders per year? What is the optimal enterable quotation in working days quotation between orders? What is the demand during the lead time? What is the reorder Point? What is the inventory position immediately after an order has been placed?
A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which have the following characteristics: > Demand (D) = 2,000 units/year > Demand is normally distributed > Standard deviation of weekly demand = 2 units > Ordering cost = $30/order > Annual holding cost (H) = $5.00/unit > Desired cycle-service level = 85% > Lead time (L) = 4 weeks Refer to the standard normal table for z-values. a. If the company uses a periodic review system, P should be 3.87 weeks. (Enter your response rounded to the nearest whole number.) T should be units. (Enter your response rounded to the nearest whole number.)
A restaurant uses 5,000 quart bottles of ketchup each year. The ketchup costs $3.00 per bottle and is served only in whole bottles because its taste quickly deteriorates. The restaurant figures that it costs $10.00 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes 3 weeks for an order to arrive. The restaurant operates 50 weeks per year. The restaurant would like to use an inventory system that minimizes inventory cost. The restaurant has figured that the most economical order size or EOQ is approx. 409 (rounding up the decimals). Suppose that things have become uncertain and that customer demand is no more constant. Customer demand is now normally distributed with mean being the same as given in the problem description and standard deviation = 30 units per week. The supply source is still very reliable and as a result the lead time is constant. Find out the safety stock needed to achieve 95% customer service level. O 55 65 075 85 None of…
A company operates for 50 weeks a year and uses a fixed quantity inventory system for one of its most important items. Below are the characteristics for the item: Weekly demand follows normal distribution: mean of 400 units and standard deviation of 100 units Order Cost = $40 per order Annual Holding cost = $2/unit/year Desired service level = 95% (z = 1.645) Lead Time = 4 weeks Economic Order Quantity (EOO) = 894 units Now suppose that the management is considering switching to a fixed time inventory system where the time between orders is 2 weeks. Everything else being the same as the information provided for the original problem, which system (Q or P system) is likely to have more safety stock? Please explain why.
A building materials stockist obtains its cement from a single supplier. Demandfor cement is reasonably constant throughout the year. Last year the company sold 2 000tonnes of cement. It estimates the costs of placing an order at around 25 MU each timean order is placed and charges inventory holding at 20% of purchase cost. The companypurchases cement at 60 MU per tonne.a) How much cement should the company order at a time?b) Instead of ordering EOQ, why not a order convenient 100 tonnes? Please mention formulas and do it in detail so I can understand.
Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics.Demand 1D2 = 20,000 units/yearOrdering cost 1S2 = $40/orderHolding cost 1H2 = $2/unit/yearLead time 1L2 = 2 weeksCycle@service level = 95 percentDemand is normally distributed, with a standard deviation of weekly demand of 100 units.Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders.a. Calculate the item’s EOQ. What is the average time, in weeks, between orders?b. Find the safety stock and reorder point that provide a 95 percent cycle-service level.
What is the relationship between the average inventory and the in-stock probability?a. The more the inventory, the lower the in-stock probability.b. There isn’t a definitive relationship—more inventory could mean a lower or a higherin-stock probability.c. The more the inventory, the higher the in-stock probability.
I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…
It takes approximately 2 weeks (14 days) for an order ofsteel bolts to arrive once the order has been placed. The demandfor bolts is fa irly constant; on the average, the manager, MichelleWu, has observed that the hardware store sells 500 of these boltseach day. Because the demand is fairly constant, Michelle believesthat she can avoid stockouts completely if she orders the bolts atthe correct time. What is the reorder poin t?
Items purchased from a vendor cost $250 each, and the forecast for next year’s demand is 2,000 units. The optimal order size is 100. The firm operates 52 weeks next year and lead time is 3 weeks. It costs $5 every time an order is placed for more units, and the storage cost is $2 per unit per year. What is the total ordering cost for a year? a.100 b.50 c.250 d.500 e.300
A company that markets hypodermic needles to hospitals. The company purchases the needles from a supplier. The annual demand is 6,603 needles. The annual setup (or ordering) cost is $31 per order and the inventory holding cost per unit per year is $11.35. The company operates 293 days a year. Calculate the optimal annual holding cost for the company.Use at least 4 decimal places.
A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which have the following characteristics:Demand (D) = 2,000 units/yearDemand is normally distributedStandard deviation of weekly demand = 3 unitsOrdering cost = $40/orderAnnual holding cost (H) = $5/unitsDesired cycle-service level = 90 percentLead time (L) = 4 weeksa. If the company uses a periodic review system, what should P and T be? Round P to the nearest week.b. If the company uses a continuous review system, what should R be?

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