Potter Machine Company expects total sales of $60,000. The price per unit is $10. The firm estimates an ordering cost of $25 per order, with an inventory carrying cost of $0.70 per unit. What is the optimal order size?
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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.Annual purchasing salaries are $65,000, operating expenses for the purchasingdepartment are $25,000, and inspecting and receiving costs are $25 per order. If thepurchasing department places 9000 orders a year, what is the average cost of ordering? What is the annual cost of ordering?You have the following information: - Ordering cost: $300/order- Carrying cost (Carrying cost): $10/year- Daily Demand rate: 20 units/day- Production rate: 70 units/day- Supply lead time: 10 weeks- Safety stock: 120 units- Initial Inventory (Stock on-hand): 1200 units- 52 weeks per year, 365 days per year Taking into account the above, answer the following : 1) Annual ordering cost. 2) Annual cost of holding inventory (annual carrying cost) 3) Total cost (total cost) 4) Should a new order be placed? YES, NO, and why? 5) If YES, in what quantity should the order be placed?
- Question 1 For supply item ABC, Andrews Company has been ordering 400 units per week. A new purchasing agent has been hired by the company who wants to start using the economic-order- quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Lead time, in days Ordering costs Insurance and handling costs Purchase price per unit Return on cash investment 20,800 5 $22 $7 $15 15% RequiredThomas Kratzer is tbe purchasing manager for theheadquarters of a la rge insurance company chain with a centralinventory operation. Thomas's fas test-moving inventory itemhas a demand of 6,000 units per year. The cost of each unit is$ 100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for anorder to arrive, and the demand for I week is 120 units. (This is acorporate operation, and there are 250 working days per year.)a) What is the EOQ?b) What is the average inventory if the EOQ is used?c) What is the optimal number of orders per yea r?d) What is the optimal number of days in between any two orders?e) What is the annual cost of ordering and holding inventory?f) What is the total annual inventory cost, including the cost ofthe 6,000 units?Explain INVENTORY PLANNING AND ACCURACY?
- The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?Nelson’s Hardware Store stocks a 19.2 volt cordless drill that is a popular seller. Annual demand is 5,000 units, the ordering cost is $15, and the inventory holding cost is $4/unit/year.a. What is the economic order quantity?b. What is the total annual cost for this inventory item?Given the following information, compute the economic order quantity, annual holding cost, annual order cost, and annual total inventory cost. Annual requirements (R) = 50,000 units Order cost (S) = $150 per order Holding rate (k) = 15% Unit cost (C) = $100 per unit
- Fixed-order-interval. Hunilabliver orders a number of chemicals from the same supplier every 30 days. Lead time is five days. the assistant production manager of the lab must determine how much of one of these chemicals to order. a check of stock revealed that eleven 25-milliliter (ml) jars are on hand. Daily usage of the chemical is approximately normal with a mean of 15.2 ml per day and a standard deviation of 1.6 ml per day. the desired service for tis chemical is 95 percent. 14.64 ml 16.62 ml 15.62 ml 273.62 ml 272.62 ml 272.64 ml How many jars of the chemical should be ordered? What is the average amount of safety stock of the chemical?Please do not give solution in image format thanku Carousel Restaurant in Coquitlam is using perpetual inventory control method. Determine the reorder quantity of chickpeas cans if the par stock is 25 cans, delivery takes 5 days, the daily usage is 2 cans and the desired safety factor is 1.5 a. 10 b. 20 c. 25 d. 15Walrus Company has the following information available concerning one of its inventory items: Cost of placing an order $30.00 Unit carrying cost per year $3.00 Annual unit demand 6,625 Safety stock 125 Average daily demand 25 Normal lead time in days 10 If there is a delay in shipping the item, approximately how many days can be covered by the safety stock? a.5 days b.110 days c.26 days d.31 days