Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 8CQ
Summary Introduction
To identify: The outcome when the order quantity is increased by 1 unit.
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Students have asked these similar questions
Among the following multi-period inventory models, which one has the highest probability of stockout?
A. Fixed Order Quantity with Safety Stock
B. Fixed Time Period Model
C. Fixed Order Quantity
D. Both Fixed Order Quantity & Fixed Order Quantity with Safety Stock
Most inventory models attempt to minimize
a. The likelihood of stockout
b. None of these
c. The numbers of orders placed
d. Total inventory-based cost
e The number of items ordered
A store has collected the following information on one of its products:Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a.
If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?
Chapter 13 Solutions
Operations Management
Ch. 13 - Which of the following is NOT true about the...Ch. 13 - A newsvendor orders the quantity that maximizes...Ch. 13 - Prob. 3CQCh. 13 - Suppose the newsvendor model describes a firms...Ch. 13 - Prob. 5CQCh. 13 - Prob. 6CQCh. 13 - A retailer has two merchandizers, Sue and Bob, who...Ch. 13 - Prob. 8CQCh. 13 - Which of the following changes in the in-stock...Ch. 13 - Prob. 10CQ
Ch. 13 - Prob. 11CQCh. 13 - Prob. 12CQCh. 13 - Prob. 13CQCh. 13 - Prob. 14CQCh. 13 - Dan McClure owns a thriving independent bookstore...Ch. 13 - Flextrola, Inc., an electronics systems...Ch. 13 - Monsanto sells genetically modified seed to...Ch. 13 - Fashionables is a franchisee of The UnLimited, the...Ch. 13 - Teddy Bower is an outdoor clothing and accessories...Ch. 13 - Prob. 6PACh. 13 - Goop Inc. needs to order a raw material to make a...Ch. 13 - Geoff Gullo owns a small firm that manufactures...Ch. 13 - Prob. 9PACh. 13 - Prob. 10PACh. 13 - Prob. 11PA
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Which of the following statements is false? a. Ordering in smaller lot sizes lead to lower inventory holding costs. b. Seasonal inventory is stored to cater predictable surge in demand. c. Cycle inventory is the average amount of inventory used to satisfy demand between replenishments. d. Safety inventory is kept when the demand is less than supply.arrow_forwardThe EOQ is optimal because it a. minimizes the total inventory cost. b. minimizes the ordering cost of inventory. c. minimizes the holding cost of inventory. d. maximizes the on-hand inventory. e. does none of these.arrow_forwardAssuming constant annual demand for an item, increasing its orderquantity: A. Increases the number of orders placed per year.B. Increases the total annual purchasing cost.C. Increases the total annual inventory carrying costs.D. Decreases the number of orders placed per yeararrow_forward
- The purpose of EQQ is: A. measure the cost of ordering inventory B. to lower the level of inventory C. to determine the optimal amount of inventory to order D. to find the number of days before inventory needs to be reorderedarrow_forwardWhich of the following is less likely to represent an inventory ordering cost? a. Warehousing costs b. Transportation costs per order c. Cost of initiating an order d. Lost profits from lost sales due to shortages e. Cost of production disruptions and set up costs to reinstate production due to shortage of raw materials or componentsarrow_forwardInstructions There are four parts to this problem. Use Excel to perform the following. a. Use the economic order quantity formula (EOQ = SQRT((2SD/H)) to determine the optimal number of units that the company should order based on each assumed level of order based on each assumed level of order quantities provided in the data. b. Complete the table by calculating the number of orders per year, annual order cost, annual holding cost, and annual total cost. Highlight the minimum annual total cost using conditional formatting. Hint: The minimum cost should equal the cost at the EOQ you calculated in part a. c. Create a line chart that graphs annual order cost, annual holding cost, and annual total cost. The x-axis should be the quantity ordered. Include a chart legend, appropriate chart title, axes labels, and properly formatted amounts on the axes. d. Examine the chart and your responses to parts a and b. Indicate any relationships.arrow_forward
- The basic EOQ model is based on all the following assumptions except: * A. Annual demand is known and constant.B. The item is always available when needed.C.Estimates of ordering and carrying costs are accurate.D.Order is instantaneously received exactly when previous inventory has just been used up.arrow_forwardFor a company operating 300 days a year, the annual demand is 63,000 units, the lead time is 4 days, the ordering cost per order is BD 80 and the inventory turnover is 12, the reorder point is A. Every 12 days B. Every 4 days C. When 175 units remain D. When 840 units remainarrow_forwardEdwarldo’s Manufacturing uses 2,400 units of a product per year on a continuous basis. The product Carrying Cost are $60 per year and Ordering Cost are $250. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory. Show Computations and Explanations. A. Calculate the Economic Order Quantity (round up the answer to the nearest whole unit) (Format: 111) B. Calculate the Total Cost per year to order and carry this item. (Format: 1,111) C. Their supplier has notified the company that if they increase their order quantity by 58 units, they will give the company a discount. Calculate the Dollar Discount that the company will have to at least give to Edwarldo’s Manufacturing to be indifferent. (Format: 111)arrow_forward
- Suppose the following item is being managed using a fixed-order quantity model with safety stock. Annual Demand = 100,000 units Order quantity = 30,000 units Safety stock = 4000 units What are the average inventory level and inventory turnover for this item?arrow_forwardYou are conducting a retrospective analysis for an Order-Up-To system (thus, the unsold inventory at the end of a week is carried over to the next week). The beginning inventory in week 1 is 150 units, the demand in week 1 is 180 units and the demand during week 2 is 250 units. If you receive a shipment of 115 units every week, at the end of week 2, the inventory level is 180 the inventory level is 200 the inventory level is 310 the backorder level is 30 the backorder level is 50 none of the above is correctarrow_forwardThe “how much to order” decision always has an influence on the followingcosts except: A. Annual purchasing costs.B. Annual carrying costs.C. Annual procurement costs.D. Total annual inventory costs.arrow_forward
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