Problem 1: Jill's Job Shop buys the following Part (X-123) for use in its production system. The parts are needed throughout the entire 52-week year. Data for the part are as follows: ITEM X-123 Annual demand 10,000 Holding cost per unit per year $4 Order cost $35 Lead time 2 weeks Safety stock 150 units Item cost $10.00 Use the Fixed-Order Quantity Model to find the following: a) Compute the optimum order quantity (Q). b) What is the reorder point (R) for the item? c) Find the Total Annual Cost (TC) for the item.

Problem 1: Jill's Job Shop buys the following Part (X-123) for use in its production system. The parts are needed throughout the entire 52-week year. Data for the part are as follows: ITEM X-123 Annual demand 10,000 Holding cost per unit per year $4 Order cost $35 Lead time 2 weeks Safety stock 150 units Item cost $10.00 Use the Fixed-Order Quantity Model to find the following: a) Compute the optimum order quantity (Q). b) What is the reorder point (R) for the item? c) Find the Total Annual Cost (TC) for the item.

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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