Z is a standard item stocked in a company WCU's inventory. Each year the firm, on a random basis, uses about 500 items Z, which costs $25 each. The source of supply is reliable and maintains a constant lead time of five days. Holding costs, which include insurance and cost of capital, amount to $6.25 per unit of average inventory. Every time an order is placed for more item Z, it costs $3. Assume that a year consists of 365 days. What reorder point, R, should be used assuming that there is no safety stock? A. 2,500 B. 7 C. 63 D. 3

The Warren W. Fisher Computer Corporation purchases 8,000 transistors each year as components inminicomputers. The unit cost of each transistor is $10, and the cost of carrying one transistor in inventoryfor a year is $3. Ordering cost is $30 per order and finds that deliveries from his supplier generally take 5working days. What are?(a) the optimal order quantity.(b) the expected number of orders placed each year.(c) the expected time between orders? Assume that Fisher operates on a 200-day working year.(d) the reorder point for the transistors.

Macagba Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year.  It costs $150 for each order of the chemical. Macagba uses the item at a constant rate each year. Calculate the Economic Order Quantity. 40.62   Use the data from above and assume that Macagba Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Macagba desires to keep a safety stock of 4 units.  Calculate the reorder point.

A liquor warehouse expects to sell 10,000 bottles of scotch whiskey in a year. Each bottle costs $14, plus a fixed charge of $125 per order. If it costs $10 to store a bottle for a year, how many bottles should be ordered at a time and how many orders should the warehouse place in a year to minimize inventory costs? bottles per order orders per year

Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available:           Relevant ordering costs per purchase order                        $41.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                              $ 4.50   What is the economic order quantity for Vision? a. 328 lenses b. 457 lenses c. 161 lenses d. 266 lenses

A retailing company believes it can sell 4 million of its main product within the upcoming financial year. The inventory manager plans to order its main product forty times over the next year. The carrying cost is $0.03 per product per year. The order cost is $600 per order. Calculate the following: i)        The annual carrying costs ECM Manufacturing Company Limited has three (3) possible suppliers, all of which offer different credit terms. Apart from the slight differences in credit terms, their products and services are virtually identical. The credit terms offered by these suppliers are shown in table shown on the next page. Supplier   Credit Terms Supplier 1 1/10 net 30 EOM Supplier 2 2/20 net 75 EOM             Supplier 3 3/10 net 50 EOM Assuming a 365-day year, answer the following. d. What impact, if any, will “stretching” the accounts payable (net period only) of supplier 3 by 30 days, have on your answer to part b with regards to supplier 3. Ans…

Enrun Corporation expects to order 140,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate.  Fixed ordering costs are $300 per order; the purchase price per chip is $20; and the firm’s inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.) How many orders should Enrun place during the year? If the lead time for placing an order is 5 days, and Enrun holds a safety stock equal to a 30-day supply of chips, then at what inventory level should an order be placed? If Enrun holds a safety stock equal to a 30-day supply of chips, what is Enrun’s minimum cost of ordering and carrying inventory?

Meijer stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which cells, on average, 55 bottles per week. Myers cost is nine dollars per bottle. Meijer has determined its order cost to be $54 in inventory Karen cost is 20%. Myers open for business 52 weeks per year. What is the EOQ? If Myers’s order the EOQ quantity each time, what will be the inventory turnover rate for the syrup?

Vita Company sells glasses. Benz Company manufactures special glass lenses. Vita orders 16,640 lenses per year, 320 per week, at $40 per lens. Benz covers all shipping costs. Vita earns 22% on its cash investments. The purchase-order lead time is 3.0 weeks. Vita sells 315 lenses per week. The following data are available:           Relevant ordering costs per purchase order                     $47.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                                   $5.50   What is the reorder point?   a. 1318 lenses   b. 1605.0 lenses   c. 660 lenses   d. 945.0 lenses

TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64 per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of inventory purchase price, is 25% per annum. What is the economic order quantity?