Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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- Question 3The weekly demand for a product, which is held in stock is always 90 units.When an order for new stock is placed, it is delivered almost instantaneously by an ordering cost of 50,000 is incurred. The product costs 3,000 per unit,and it costs 15 percent of this amount to hold a unit in stock for a year.Currently, orders are placed for 2000 units. There are 50 working weeks in ayear and lead time is one week. a) As a management science student, the MD of the company seeks yourexpert advice on ways in which to determine the economic order quantity,optimal order cycle time, re-order level and total annual inventory cost.Advise the MD, providing detailed explanation using your answer. Writeyour answer in a form of a report to the MD. b) Advise the MD about savings, if any, could be made by changing fromcurrent order quantity of GH¢ 2000 units to the one obtained in (a) above. c) Describe the order policy followed by the firm based on your calculationsarrow_forwardQuestion 4 Which of the following could be the cross-price elasticity of demand for two goods that are complements? O c. 1.3 a.-1.3 Ob. 0.2 d. 2arrow_forwardQ.2. Discuss TWO short term and TWO long term strategies for minimizing supply chains disruptions globallyarrow_forward
- b. Question 4 Fortis Utility Company uses 2,000 units per year which it stores at $0.50 per unit per annum. The cost to place an order is $100. Calculate: If the company decides to make the items on its own machine with a potential capacity of 4,000 units per year, calculate: i. the batch order quantity (BOQ) the annual ordering cost the annual carrying cost ii. the economic order quantity (EOQ) the number of orders. iii.arrow_forwardQUESTION 1 Which of the following statements regarding foreast sharing game is INCORRECT? Retailer only faces underage risk. Supplier faces both underage and overage risks. Suppliers tend to produce less than the supply chain optimal quantity. The retailer has to purchase at least the quantity it reports to the supplier. QUESTION 2 Assume that the firm can source from 2 faraway suppliers (each has Lead time = 4 months, capacity=60 k) and 2 Closeby suppliers (each Lead time =0 month, capacity=40k). The sales season starts in May. Which of the following statements regarding sourcing is INCORRECT? The production change should be only applied to the Closeby supplier so that the firm can benefit from the change in time. The production at the Faraway supplier should start in January and the production at Close-by supplier should start in May. The firm should source from a combination of one faraway supplier and one close-by…arrow_forwardQUESTION 15 ID-planned order release using EOQ technique Clancy's Motors has the following demand to meet for custom manufactured fuel injector parts. The holding cost for that item is $2 per month and each setup costs $80. Lead time is 0 months. Calculate the planned order releases using: the EOQ technique including the holding cost of any inventory left over after month 7? Month Requirement 1 400 What is the total cost? 2016 2509 1405 1536 2 150 3 200 150 100 150 250arrow_forward
- Inventory is not a property that is acquired for the purpose of resale in a business activity. Question 4 options: True Falsearrow_forwardQuestion: How do you use the Silver-Meal ordering policy to find the Total annual Cost for the damand and parameters listed below? Month Period Demand Jan. 1 110 Feb. 2 40 Mar. 3 150 Apr. 4 130 May 5 60 Jun. 6 30 Jul. 7 20 Aug. 8 30 Sep. 9 80 Oct. 10 120 Nov. 11 130 Dec. 12 100 Total 1000 Given cost parameter: Value Order cost $25 Unit cost $8 Holding cost rate (monthly) 5%arrow_forwardQ.1. Discuss the implication of strategic supplier management strategies in enhancing supply chain resilience and competitiveness.arrow_forward
- QUESTION 12 A vendor for the local ballpark food stand is questioning whether to stock his concession with a large or small inventory. He believes that it will depend upon the size of the crowd. He has developed a payoff matrix for the various alternatives (stocking decision) and states of nature (size of crowd). What is the answer using the criterion of maximin? Alternatives Large Inventory Small Inventory Probability OA) -$2,000 O B) $0 OC) $51,667 OD) $220,000 O E) -$5,000 Large Crowd $220,000 $90,000 .20 PROFIT (S) Average Crowd $50,000 $70,000 1.50 Small Crowd -$2,000 -$5,000 30arrow_forwardWhat can purchasing do to implement j ust-in-time deliveries?arrow_forwardQ7arrow_forward
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