Total Stock Administration costs under the EOQ model is the sum of: Select one: a. Carrying costs and reorder level costs b. Ordering costs and Carrying costs c. Storage and carrying costs d. Minimum stock costs and reorder quantity
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Total Stock Administration costs under the EOQ model is the sum of:
Carrying costs and reorder level costs
Ordering costs and Carrying costs
Storage and carrying costs
Minimum stock costs and reorder quantity
Step by step
Solved in 2 steps
- Solve the following EOQ model problems: 1. Each The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. year, Y Company purchases 20,000 units of an item that costs P 640 per unit. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.Solve the following EOQ model problems:1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150.a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero?c. Determine the total annual ordering cost and the total annual holding cost forthe item if the EOQ is used.2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week.a. Find the EOQ.b. Find the reorder point.c. What would be your ordering policy for this item?d. Find the total annual cost of ordering and carrying silicon chips.3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a…the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?
- AaBbCc AaBbCc AaBbCc No Spacing Normal Reuse Heading 1 Replace Files Paragraph Styles Editing Reuse Files Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation of 12. If Hinsdale cannot have stockouts in more than 10% of the time in any order, how much safety stock should be maintained and at what reorder point? 1. SKU F5402: daily demand is normally distributed with a mean of 16, standard deviation of 4, lead time is 4 days, and must operate at a 95% service level. 2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally with a mean of 6 days and standard deviation of 2 days, and must operate at a 95% service level. 3. SKU F9004: daily demand is normally distributed with a mean of 21 units and a standard deviation of 3 days. The lead time is also normally distributed with a mean of 4 days, standard deviation of 2 days, and a service level of 90% is required. dictions: On acer %24 4. % &…= = +E v No Spacing Normal Aav Replace Heading 1 Reuse Dictate Editor Files Paragraph Styles Editing Reuse Files Voice Editor Item SKU A3378 has a demand that is normally distributed during the lead time, with a mean of 360 units and standard deviation 9999 of 12. If Hinsdale cannot have stockouts in more than 10% of the time in any order, how much safety stock should be maintained and at what reorder point? 1. SKU F5402: daily demand is normally distributed with a mean of 16, standard deviation of 4, lead time is 4 days, and must operate at a 95% service level. 2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally with a mean of 6 days and standard deviation of 2 days, and must operate at a 95% service level. 3. SKU F9004: daily demand is normally distributed with a mean of 21 units and a standard deviation of 3 days. The lead time is also normally distributed with a mean of 4 days, standard deviation of 2 days, and a service level of 90% is required. Text…1. Calculate Economic Order Quantity (EOQ), number of orders, annual ordering costs, annual carrying costs and total inventory costs from the following: Annual consumption: 6000 units ; Cost of placing one Order: RO 60 Carrying cost per unit: RO 22. Find out the EOQ, Annual ordering cost and annual holding cost from the following information. The demand is 19500 units per year, holding cost is RO 4 per unit for a year and ordering cost is RO 25 order. 3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units.
- William Beville’s computer training school, inRichmond, stocks workbooks with the following characteristics: Demand D = 19,500 units>yearOrdering cost S = +25>orderHolding cost H = +4>unit>yeara) Calculate the EOQ for the workbooks.b) What are the annual holding costs for the workbooks?c) What are the annual ordering costs?- Maintenance department in an oil company uses 4000 small bolts a year. Bolts are priced as follows: (1$-100 cents) 1 to 499 90 cents each 500 to 999 85 cents each 1000 and more 80 cents each It costs approximately $30 to prepare an order and receive it. Carrying costs are 40% of purchase price per unit on an annual basis. Determine the optimal order quantity and the total annual cost.To establish the reorder point in the EOQ model, we must know both: A. The annual demand and the number of orders placed per year.B. The annual demand and the lead time.C. The daily demand and the order quantity.D. None of the above
- Order Quantity and Reorder PointDaily demand for a certain product is normally distributed, with a mean of 60 and a standard deviation of 7. The source of supply is reliable and maintains a constant lead time of six days. The cost of placing the order is $10 and annual holding costs are $0.50 per unit. There are no stock-out costs, and unfilled orders are filled as soon as the order arrives. Assume sales occur over the entire 365 days of the year. Find the order quantity and reorder point to satisfy a 95 percent probability of not stocking out during the lead time.EOQ, reorder point, and safety stock Alexis Company uses 937units of a product per year on a continuous basis. The product has a fixed cost of $44 per order, and its carrying cost is $4 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. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity.EOQ, reorder point, and safety stock Alexis Company uses 916 units of a product per year on a continuous basis. The product has a fixed cost of $60 per order, and its carrying cost is $3 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. a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.) c. Determine the reorder point. d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. a. Alexis' EOQ is units. (Round to the nearest whole number.)