Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,and uses a continuous review inventory system. It purchaseskitty litter for $10.75 per bag. The following information isavailable about these bags.Demand = 95 bags>weekOrder cost = $58>orderAnnual holding cost = 25 percent of costDesired cycle@service level = 90 percentLead time = 4 weeks 128 working days2Standard deviation of weekly demand = 16 bagsCurrent on-hand inventory is 315 bags, with no open ordersor backorders. a. Suppose that the weekly demand forecast of 95 bags isincorrect and actual demand averages only 65 bags perweek. How much higher will total costs be, owing to thedistorted EOQ caused by this forecast error?b. Suppose that actual demand is 65 bags but that orderingcosts are cut to only $10 by using the Internet to automateorder placing. However, the buyer does not tell anyone,and the EOQ is not adjusted to reflect this reduction in S.How much higher will total costs be, compared to whatthey could be if the EOQ were adjusted?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Sam’s Cat Hotel operates 52 weeks per year, 7 days per week,
and uses a continuous review inventory system. It purchases
kitty litter for $10.75 per bag. The following information is
available about these bags.
Demand = 95 bags>week
Order cost = $58>order
Annual holding cost = 25 percent of cost
Desired cycle@service level = 90 percent
Lead time = 4 weeks 128 working days2
Standard deviation of weekly demand = 16 bags
Current on-hand inventory is 315 bags, with no open orders
or backorders.
a. Suppose that the weekly demand
incorrect and actual demand averages only 65 bags per
week. How much higher will total costs be, owing to the
distorted EOQ caused by this forecast error?
b. Suppose that actual demand is 65 bags but that ordering
costs are cut to only $10 by using the Internet to automate
order placing. However, the buyer does not tell anyone,
and the EOQ is not adjusted to reflect this reduction in S.
How much higher will total costs be, compared to what
they could be if the EOQ were adjusted?
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