Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 8.2, Problem 12P
(a)
Summary Introduction
Interpretation: The reason for the EOQ formula may result in poor solution for planned order release is to be determined.
Concept Introduction: The optimal order policy is known as economic order quantity (EOQ) which is used to order the different quantities in such way that minimizes the holding cost and ordering cost.
(b)
Summary Introduction
Interpretation: It is to be determined that EOQ formula will or will not result in the optimal lot sizing at each level of product structure.
Concept Introduction: The optimal order policy is known as economic order quantity (EOQ) which is used to order the different quantities in such way that minimizes the holding cost and ordering cost.
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a. Discuss why the EOQ formula may give poor results for determining planned order releases.b. If the forecasted demand for the end item is the same each period, will the EOQ formula result in optimal lot sizing at each level of the product structure? Explain.
David’s Delightful Kites Company (DDKC) manufactureskites. Th e most popular is David’s Daredevil model. Demandmanagement has prepared forecast estimates for the next sixweeks. Beginning inventory is 15 David’s Daredevils. As themaster scheduler for DDKC, you must prepare an MPS. Your MPSorder quantity is 72 kites.
(a) Prepare the MPS using an order quantity of 72 kites.(b) Calculate the ending inventory for each period.(c) What is the maximum number of units held in inventory?(d) How many MPS orders are needed?
The two most important inven tory-based questionsanswered by the typical inventory model are:a) when to place an order and the cost of the order.b) when to place an order and how much of an item to order.c) how much of an item to order and the cost of the order.d) how much of an item to order and with whom the order should be placed.
Chapter 8 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 8.1 - Prob. 1PCh. 8.1 - Prob. 2PCh. 8.1 - Prob. 3PCh. 8.1 - Prob. 4PCh. 8.1 - Prob. 5PCh. 8.1 - Prob. 6PCh. 8.1 - Prob. 7PCh. 8.1 - Prob. 8PCh. 8.1 - Prob. 9PCh. 8.2 - Prob. 10P
Ch. 8.2 - Prob. 11PCh. 8.2 - Prob. 12PCh. 8.2 - Prob. 13PCh. 8.2 - Prob. 14PCh. 8.2 - Prob. 15PCh. 8.2 - Prob. 16PCh. 8.2 - Prob. 17PCh. 8.2 - Prob. 18PCh. 8.2 - Prob. 19PCh. 8.2 - Prob. 20PCh. 8.2 - Prob. 21PCh. 8.2 - Prob. 22PCh. 8.3 - Prob. 23PCh. 8.3 - Prob. 24PCh. 8.3 - Prob. 25PCh. 8.4 - Prob. 26PCh. 8.4 - Prob. 27PCh. 8.4 - Prob. 28PCh. 8.4 - Prob. 29PCh. 8.5 - Prob. 30PCh. 8.5 - Prob. 31PCh. 8.5 - Prob. 32PCh. 8.5 - Prob. 33PCh. 8.5 - Prob. 34PCh. 8.6 - Prob. 35PCh. 8.6 - Prob. 36PCh. 8.6 - Prob. 37PCh. 8.6 - Prob. 38PCh. 8.6 - Prob. 39PCh. 8.6 - Prob. 40PCh. 8 - Prob. 41APCh. 8 - Prob. 42APCh. 8 - Prob. 43APCh. 8 - Prob. 44APCh. 8 - Prob. 45APCh. 8 - Prob. 46APCh. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51AP
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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
- The seasonal demand for a particular product is given below: Period 12 3 4 56 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $1.3 Calculate total ordering cost using the following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantityarrow_forwardThe seasonal demand for a particular product is given below: Period 1 2 3 4 5 6 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $ 1.3 Calculate total ordering cost using following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantity Which method you will chose to order and why? Please do fast... ASAP... do fastarrow_forwardExplain the significance of the Economic Order Quantity (EOQ) formula in the Wilson approach.arrow_forward
- Objectives of Inventory Control in Procter & Gamble.arrow_forwardThe seasonal demand for a particular product is given below: Period 1 2 3 4 5 6 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $1.3 Calculate total ordering cost using following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantity Please do fast .. ASAP.. fastarrow_forward1. A single inventory item is ordered from an outside supplier. The anticipated demand for this item over the next 12 months is 6, 12, 4, 8, 15, 25, 20, 5, 10, 20, 5, and 4. Current inventory of this item is 4, and ending inventory should be 8. Assume a holding cost of $1 per period and a setup cost of $40. Determine the order policy for this item based on a. Determine lot sizing do you obtain with the capacity constrain. b. Determine the lot sizes using back-shifting.arrow_forward
- A single inventory item is ordered from an outside supplier. The anticipateddemand for this item over the next 12 months is 6, 12, 4, 8, 15, 25, 20, 5, 10, 20, 5,12. Current inventory of this item is 4, and ending inventory should be 8. Assume aholding cost of $1 per period and a setup cost of $40. Determine the order policyfor this item based ona. Silver–Meal.arrow_forwardA initially assume that Phi wants to minimize his inventory requirements. Assume that each order will be only for what is required for a single period. Calculate the net requirements and planned order releases for the gear boxes and input shafts. Assume that lot sizing is done using a lot-for-lot (L4L). Gear box requirements Week 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements Scheduled receipts Projected available balance Net requirements Planned order receipt Planned order release Input shaft requirements Week 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements Scheduled receipts Projected available balance Net requirements Planned order receipt Planned order releasearrow_forwardThe primary objective in determining the Economic Order Quantity (EOQ) for an item is to: O minimize the quantity of the item ordered from the supplier each time. O minimize the annual total inventory cost for that item. order the item from a supplier located in close proximity. O maximize the time between orders. O find a quick and easy way to answ dependent or independent. the lot sizing question, regardless of whether the demand for the item isarrow_forward
- 5. FCC Company has estimated the demands for a particular part as follows: Period 1 3 4 5 6. Demand (units) 44 2 10 42 46 2 The cost per setup (order) is $50, and the inventory holding cost is $5 per unit per period. There are currently no parts available in inventory. The company wishes to determine when and how much to order over the next 6 periods. (a) For each of the following methods, develop the ordering plan, determine the inventory levels at the end of each month and calculate the sum of the associated total setup and inventory holding costs. The Silver-Meal method • Least unit cost • Part period balancing (b) Apply the Wagner-Whitin algorithm to determine • the optimal order quantities and inventory levels in each period, and • the minimum sum of the ordering and inventory carrying costs.arrow_forwardanswer in 30 minutes. The seasonal demand for a particular product is given below: Period 1 2 3 4 5 6 Demand 300 450 100 450 450 100 The fixed parameters are: Fixed Cost $8 Unit Production Cost $1 Holding Cost $1.3 Calculate total ordering cost using following three methods: i) Lot-for-Lot ii) Wagner-Whitin algorithm iii) Fixed order quantityarrow_forwardSolve the newsperson problem. Probability 0.11 0.08 0.22 0.26 0.12 0.21 Value 1 2 3 4 5 6 Purchase cost c = 27 Selling price p = 35 Salvage value v = 15 What is the optimal order quantity?arrow_forward
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