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Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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William Beville’s computer training school, in
Richmond, stocks workbooks with the following characteristics:
Demand D = 19,500 units>year
Ordering cost S = +25>order
Holding cost H = +4>unit>year
a) Calculate the EOQ for the workbooks.
b) What are the annual holding costs for the workbooks?
c) What are the annual ordering costs?
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- ← William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D 19,400 units/year Ordering cost S $27/order Holding cost H $5/unit/year a) The EOQ for the workbooks is 458 (round your response to the nearest whole number). b) What are the annual holding costs for the workbooks? $ 1145 (round your response to the nearest whole number). c) What are the annual ordering costs? $ (round your response to the nearest whole number).arrow_forwardDiscuss considerations that should be fully taken into account when developing inventory related relevant costs for use in an economic order quantity (EOQ) model. Why do conflicts arise between the EOQ model's optimal order quantity and the order quantity that managers regard as optimal?arrow_forwardA museum of natural history is having problems managing their inventories. Low inventory turnover is squeezing profit margins and causing cash-flow problems. A Class A item, a birdfeeder is also a top-selling item. See information for this item in the table below. Management has been ordering in lots of 390 units. 1) What is the annual cost of the current policy (hint: find the current total cost with the current order size, Q)? 2) What is the Economic Order Quantity or the optimum order quantity (EOQ) for the birdfeeders? 3) What is the total annual cost of ordering at the EOQ? How much could be saved if the museum ordered at the EOQ opposed to their current order size of 390 units? 4) When should the museum place an order, at how many units (i.e.: what is their reorder point or lead time demand)? Sales per week (demand) Purchase cost Order cost Annual holding cost Birdfeeder: Operating weeks per year Lead time for orders (weeks) Order size EOQ (calculated) 18 $ $ 60.00 45.00 25% of…arrow_forward
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- 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. % &…arrow_forwardThe Hodson Gallery and Art Museum distributes a printed guide for its visitors. There are about 18000 visitors per year. Holding costs for the brochures are 20% and it costs $30 to place an order with the printer. A. Assuming the cost for each guide is $2.50, how many should be printed at a time? B. Now assume the printer has offered the following discount schedule: Category Order Size Unit Cost 1 0 - 1499 $2.50 2 1500 - 2999 $2.20 3 3000 and over $1.80 Now how many brochures should be printed at a time?arrow_forward
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