Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 11P
At Dot Com, a large retailer of popular books, demand is constant at 32,000 books per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per book. Stock is received 5 working days after an order has been placed. No backordering is allowed. Assume 300 working days a year.
- What is Dot Com’s optimal order quantity?
- What is the optimal number of orders per year?
- What is the optimal interval (in working days) between orders?
- What is demand during the lead time?
- What is the reorder point?
- What is the inventory position immediately after an order has been placed?
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At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to replenish stock is $75, and the annual cost of holding is $6.00 per book. Stock is received 6 working days after an order has been placed. No backorder is allowed. Assume 250 working days a year.
**(Enter your response rounded to the nearest whole number.)**
Dot Com's optimal order quantity is ______ books.
What is the optimal number of orders per year?
What is the optimal enterable quotation in working days quotation between orders?
What is the demand during the lead time?
What is the reorder Point?
What is the inventory position immediately after an order has been placed?
Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics.Demand 1D2 = 20,000 units/yearOrdering cost 1S2 = $40/orderHolding cost 1H2 = $2/unit/yearLead time 1L2 = 2 weeksCycle@service level = 95 percentDemand is normally distributed, with a standard deviation of weekly demand of 100 units.Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders.a. Calculate the item’s EOQ. What is the average time, in weeks, between orders?b. Find the safety stock and reorder point that provide a 95 percent cycle-service level.
Company XYZ makes bicycles. XYZ produces 400 bicycles a month. They must buy tires from a supplier at a cost of $20 per tire. The inventory holding cost rate is 15% and ordering costs $50 per order.
Part i) Let’s assume that there is no shortage inventory allowed.
Calculate optimal annual order quantity
Calculate annual total inventory cost ^already have the answer for this one. Just input the whole question so it would make more sense.
Part ii) Let’s assume that shortage inventory is allowed. With that being said, we know that the shortage cost per unit of item is $5 per year. <<this is the one that I am stuck on.
Calculate optimal annual order quantity
Calculate annual total inventory cost
Hint: Each bicycle has two tires.
Chapter 9 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. 9 - What is the relationship between inventory and the...Ch. 9 - Suppose that a large discount retailer with a lot...Ch. 9 - Will organizations ever get to the point where...Ch. 9 - A part is produced in lots of 1,000 units. It is...Ch. 9 - Prince Electronics, a manufacturer of consumer...Ch. 9 - Terminator, Inc. manufactures a motorcycle part in...Ch. 9 - Ruby-Star Incorporated is considering two...Ch. 9 - Haley Photocopying purchases paper from an...Ch. 9 - Prob. 6PCh. 9 - Southern Markets, Inc. is considering the use of...
Ch. 9 - New Wave Shelving’s inventory manager would like...Ch. 9 - Yellow Press, Inc. buys paper in 1,500-pound rolls...Ch. 9 - Babble, Inc. buys 400 blank cassette tapes per...Ch. 9 - At Dot Com, a large retailer of popular books,...Ch. 9 - Leaky Pipe, a local retailer of plumbing supplies,...Ch. 9 - Sam’s Cat Hotel operates 52 weeks per year, 6...Ch. 9 - Consider again the kitty litter ordering policy...Ch. 9 - In a Q system, the demand rate for strawberry ice...Ch. 9 - Petromax Enterprises uses a continuous review...Ch. 9 - In a continuous review inventory system, the lead...Ch. 9 - In a two-bin inventory system, the demand for...Ch. 9 - You are in charge of inventory control of a highly...Ch. 9 - Your firm uses a continuous review system and...Ch. 9 - A company begins a review of ordering policies for...Ch. 9 - Prob. 22PCh. 9 - The Farmer’s Wife is a country store...Ch. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - In a P system, the lead time for a box of...Ch. 9 - Suppose that Sam’s Cat Hotel in Problem 13 uses...Ch. 9 - Your firm uses a periodic review system for all...Ch. 9 - Using the same information as in Problem 21,...Ch. 9 - Wood County Hospital consumes 1,000 boxes of...Ch. 9 - A golf specialty wholesaler operates 50 weeks per...Ch. 9 - What is the EOQ and what is the lowest total cost?Ch. 9 - What is the annual cost of holding inventory at...Ch. 9 - Prob. 3AMECh. 9 - Prob. 4AMECh. 9 - Prob. 5AMECh. 9 - Prob. 6AMECh. 9 - Comment on the sensitivity of the EOQ model to...Ch. 9 - Consider the pressures for small versus large...Ch. 9 - Prob. 2VCCh. 9 - The Marker Maker© product recently experienced an...Ch. 9 - Put yourself in Sue McCaskey’s position and...Ch. 9 - By how much do your recommendations for these two...
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