Suppose that a publishing company periodically replenish its supply of paper stock. The paper comes in large rolls and that the printer uses 8100 rolls per year. The cost of ordering is OMR 20 per order.  The cost of keeping the paper on hand, including rent for space occupied, insurance, and interest on the capital tied up is OMR 10 per roll per year. Then, the Minimum Annual Total Inventory Cost is OMR (.....................). (Write the number only)      Answer:

Fursan Inc. needs 310 kgs of a material per month (four weeks). It costs RO 10 to make and receive an order, and it takes 14 work days to receive it. The annual holding cost is 15 % of purchase price. The price RO 1 per kg. The company is operating 6 days per week. At what level of inventory in Kgs should the company be placing orders? Round-up to the nearest integer Select one:   a. 200   b. 175   c. 181   d. 188

Describe the perpetual and the periodic inventory systems. How are they different?

Your supplier gives you a quantity discount if you buy at least 500 units at a time, a price of $4.90. Your ordering cost is $30, and the interest rate is 22% of the unit cost. Annual demand is 2,000, so the EOQ is 334. Calculate the total costs (consisting of holding, ordering, and cost of goods), assuming that you buy at least enough to get the quantity discount.

43. Pies 'R'Us bakes its own pies on the premises in a large oven that holds 100 pies. They sell the pies at a fairly steady rate of 86 per month. The pies cost $2 each to make. Prior to each baking, the oven must be cleaned out, which requires one hour's time for four workers, each of whom is paid $8 per hour. Inventory costs are based on an 18 percent annual interest rate. The pies have a shelflife of three months. a. How many pies should be baked for each production run? What is the annual cost of setup and holding for the pies? b. The owner of Pies 'R’Us is thinking about buying a new oven that requires one-half the cleaning time of the old oven and has a capacity twice as large as the old one. What is the optimal number of pies to be baked each time in the new oven? c. The net cost of the new oven (after trading in the old oven) is $350. How many years would it take for the new oven to pay for itself?

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Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. Upon hearing that Ross White is considering the producing the brackets in-house, the supplier has notified Ross that the purchase price would drop from $15 per bracket to $14.50 per bracket if Ross purchase the brackets in lots of 1000. After analyzing the cost of the various options for obtaining the brackets, Ross White recognizes that although he knows the lead time is 2 days, the average daily demand usually varies. Ross has kept careful records and has determined that the average daily demand is normally distributed with a standard deviation of 2.5 units. If Ross would like to maintain a service level of 90 %,…