The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics: Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per case Given the above information, the EOQ and total cost are: A 40 percent increase in demand changes the EOQ to _____ cases at a total cost of _____ A 20 percent increase in carrying charges change the EOQ to _____ cases at a total cost of _____

The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics: Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per case Given the above information, the EOQ and total cost are: A 40 percent increase in demand changes the EOQ to ___ cases at a total cost of _ A 20 percent increase in carrying charges change the EOQ to _ cases at a total cost of ___

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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The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per casea. How many cases should be ordered at a time?b. How often will tea be ordered?c. What is the annual cost of ordering and carrying tea?d. What factors might cause the firm to order a larger or smaller amount than the EOQ?
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
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?
A sports fan store sells hats. The following are associated characteristics for hats Annual Demand 16000 units Ordering costs $26 Holding costs $4 per unit/year **round all your answers to the nearest whole number a) The EOQ for the hats is b) The annual holding costs for the hats at the EOQ are c) The annual ordering costs for the hats at the EOQ are 2. Antique manufactures old-fashioned telephones for use in movie scenes (and other displays). Antique's annual demand for rotary telephones is 33,000 units per year, so it needs just as many receptors to assemble the phones. Receptors are ordered from a supplier, and shipping and handling costs are $15 per order (regardless of how many units are on order). The holding costs are $7/unit/year. If the current company policy calls for orders of 3,000 receptors, what are the total annual inventory costs for the receptors? round your final answer to the nearest whole dollar.
Fush uses an average of 40 boxes of paper serviettes a day. The restaurant operates 260 days per year, storage and handling costs for the serviettes are $ 30 per year per box, and it costs approximately $60 to order and receive a shipment of serviettes. a. Calculating the order size would minimise the sum of annual ordering and carrying costs? b. compute the total annual costs using your size from part a?
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 97,200 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. What is the economic ordering quantity? How many orders will be placed during the year? What will the average inventory be? What is the total cost of ordering and carrying inventory?
A local artisan uses supplies purchased from an overseas supplier. The owner believes the assumptions of the EOQ model are met reasonably well. Minimization of inventory costs is her objective. Relevant data, from the files of the craft firm, are annual demand (D) = 150 units, ordering cost (S) = $42 per order, and holding cost (H) = $4 per unit per year. a. How many should she order at one time? b. How many times per year will she replenish her inventory of this material? c. What will be the total annual inventory costs associated with this material? d. If she discovered that the carrying cost had been overstated, and was in reality only $1 per unit per year, what is the corrected value of EOQ?
Kendi Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days’ usage in inventory as a safety stock. Show Computations and Explanations. A. Calculate the EOQ. B. Determine the Average Level of Inventory. (Note: Use a 365-day year to calculate daily usage.) (Format: 111.11) C. Determine the Reorder Point. (Format: 11.11)
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?
Maroons Medical Supplies, Inc. must order masks from its supplier in lots of 1 dozen boxes. Given the information provided below, complete the following table: Annual demand 26,000 dozen Cost per order placed P30 Carrying cost 20% Price per dozen P7.80 Order Size (Dozen) 250 500 1,000 2,000 13,000 26,000 Number of orders Average inventory Carrying cost Order cost Total cost 1. What is the EOQ? Thank you so much!
Thomas Kratzer is the purchasing manager for theheadquarters of a large insurance company chain with a centralinventory operation. Thomas’s fastest-moving inventory item hasa 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 aver-age ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 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 year?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?