Concept explainers
a)
Interpretation: Determine the lot-sizing for the 10 periods using silver-meal method.
Concept Introduction: Silver-Meal method is mainly focused on production planning in production firms. This method also provides the approximate solutions to the time-varying demands products.it is used to take decisions based on lot sizing.
b)
Interpretation: Determine the lot-sizing for the 10 periods using least unit cost method.
Concept Introduction: The main aim of the Least Unit Cost (LUC) method is that to minimize or reduced the average of the cost to the every unit. This method will not perform effectively when the ordering cost are constant.it is also one of the dynamic lot-size technique.
c)
Interpretation: Determine the lot-sizing for the 10 periods using part period balancing method.
Concept Introduction: Part Period Balancing (PPB) technique is the lot-sizing method.it will reduces the adding the ordering costs and carrying inventory costs for an every single product.it will also used to plan the order based on changing date and number of quantities.
d)
Interpretation: Determine the three lot-sizing method resulted in the lowest cost for the 10 periods.
Concept Introduction: During the production time, quantity order will be determined is defined as lot size. Lot size may be static or dynamic. Mostly, Lot size will be determined through the consumer order, production size, batch size of the machine and so on.
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Production and Operations Analysis, Seventh Edition
- Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. When should Item X be ordered? * Whenever Item X's inventory level drops to 50 units O Every 9 days Every 50 days 50 times a year How much would be Item X's total annual procurement cost? *arrow_forwardBasic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. When should Item X be ordered? * Whenever Item X's inventory level drops to 50 units O Every 9 days Every 50 days 50 times a year How much would be Item X's total annual procurement cost? *arrow_forwardBasic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How many units of Item X should be ordered each time? * O 94 units 2,000 units O 95 units O 100 unitsarrow_forward
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- (a) Give examples of independent and related dependent demand (b) APL company assembles and sales an electronics device (ED) on a contract basis. End item ED has composed of 3 units of subassembly BG and 5 units of component DD. BG is assembled using 3 DDs and 4 FCs. There are orders of 500 and 875 units of the device (ED) at the beginning of week 6 and week 8. In assembling BG, an extra 20 percent scrap allowance must be added. DD can only be ordered in whole cases of 400 units per case. One case of DD is received in each of week 1 and week 2. Also, there are 200 units of BG and 425 units of DD now on hand. The lead time for the item BG, DD, and FC is 2 weeks and that is for the item ED is 1 week.i. Calculate the required number of DD and FC for producing 100 units of ED. There is no stock of any item. ii. Prepare a material requirements plan for the component DD.arrow_forwardA local outdoor vegetable stand has exactly 1,000 square feet of space to displaythree vegetables: tomatoes, lettuce, and zucchini. The appropriate data for theseitems are given in the following table.ItemTomatoes Lettuce ZucchiniAnnual demand 850 1,280 630(in pounds)Cost per pound $0.29 $0.45 $0.25The setup cost for replenishment of the vegetables is $100 in each case, and thespace consumed by each vegetable is proportional to its costs, with tomatoes requiring 0.5 square foot per pound. The annual interest rate used for computingholding costs is 25 percent. What are the optimal quantities that should be purchased of these three vegetables?arrow_forwardConsider the following information. PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Q = 60, LT= 3 weeks, Safety Stock = 5 1 70 70 PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Planned Order Releases 1 70 70 100 2 0 > X WEEK 3 40 Compute the planned order releases and projected on-hand inventory for component part X. Round your answers to the nearest whole number. If your answer is zero, enter "0". 2 0 4 0 100 WEEK 3 40 5 160 60 4 0 40 0 X 5 160 Check My Work -60 0arrow_forward
- The fixed quantity version of EOQ compares and contrasts with the fixed interval version. Where will each of the scenarios be used?arrow_forwardElectro Fans has just received an order for one thousand 20˝ fans due in week 7. Each fan consists of a housing assembly, two grills and a fan assembly. The housing assembly consists of a frame, two supports and a handle. The following table gives lead times, on-hand inventory, and scheduled receipts. Table 1.1: Lead time and quantity on hand Item Lead Time Qty on hand Lot size# Scheduled receipt 20˝ Fan Housing Frame Supports (2) Handle Grills (2) Fan Assembly 1 1 2 1 1 2 3 80 90 - 50 400 200* 150 - - - 100 400 450 - 50 fan assembly in week 2 * In week 3 it was found that 50% of the on hand inventory of the grills was damaged. # Items without any lot size given should be considered as lot-for-lot. (i) Construct a product structure. (ii) Construct a time-phased product structure. (iii) Prepare a net requirement plan.arrow_forwardExercise 2: The demand per year (D) for product X is 12,100 units. The costs of placing an order (S) are $4.50. The unit cost (C) of the item is $25.00. The maintenance cost (H) per unit per year is 30% of the item's cost. 1. Use the economic order quantity (EOQ) model to determine: *Optimal quantity to order* The expected number of orders*Optimal time between orders*The total annual cost of maintaining that optimal amountNOTE: Show calculations of how you arrived at each amount 2. Answer, what are the potential benefits of using EOQ analysis for inventory management? How can you help businesses strike a balance between inventory holding costs and ordering costs?arrow_forward
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