Inventory carrying costs differ from inventory holding costs when: A. The item is not moved from one place of the storage area to another. B. The owner of the inventory does not own the warehouse. C. The item is not perishable. D. None of the above

Inventory carrying costs differ from inventory holding costs when: A. The item is not moved from one place of the storage area to another. B. The owner of the inventory does not own the warehouse. C. The item is not perishable. D. None of the above

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Description: Inventory carrying costs differ from inventory holding costs when:A. The item is not moved from one place of the storage area to another.B. The owner of the inventory does not own the warehouse.C. The item is not perishable.D. None of the above

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.
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1. The overall objective of inventory management is to achieve satisfactory levels of customer service by having sufficient quantities while keeping inventory costs reasonable. True or false
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Inventory carrying costs differ from inventory holding costs when: * The owner of the inventory does not own the warehouse. The item is not perishable. None of the above The item is not moved from one place of the storage area to another.
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As the Manager of Branson’s Department Store, you are responsible for ensuring that reorder quantities for the various items have been correctly established. You decide to test one item and choose product Z. A continuous review inventory policy has been used, so you examine this as well as other records and come up with the following data: Cost per unit $35 Holding cost 20 percent of unit cost Average daily demand 10 units Ordering cost $30 per order Standard deviation of daily demand 3 units Delivery lead time 4 days Because customers generally do not wait but go elsewhere, you decide on a service probability of 90 percent. Assume that Branson’s Department Store operates 320 days per year. [What is the annual demand (D)? Determine the optimal order quantity, Q*. Determine the reorder point (R) if demand is constant. Determine the reorder point (R) if demand is varies.
EOQ, reorder point, and safety stock Alexis Company uses 916 units of a product per year on a continuous basis. The product has a fixed cost of $60 per order, and its carrying cost is $3 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. a. Alexis' EOQ is units. (Round to the nearest whole number.)
You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and has the following characteristics for its primary item: Demand = 25,000 units/year Ordering cost = $30/order Holding cost = $1/unit/year Lead time = 4 days Standard deviation in daily demand = 10 units What is the total holding cost per year, including annual holding cost for safety stock (to the nearest whole number)? (Service level=95%) answer is 645 but why?
Thompson Paint Company uses 60,000 gallons of pigment per year. The cost of ordering pigment is $200 per order, and the cost of carrying the pigment in inventory is $1 per gallon per year. The firm uses pigment at a constant rate every day throughout the year. a. Calculate the EOQ. b. If it takes 20 days to receive an order once it has been placed, determine the reorder point in terms of gallons of pigment. (Note: Use a 365-day year.)
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