2.7 Which of the following help explain how the Reorder Point (ROP) works in conjunction with theEconomic Order Quantity (Q), the number of orders (N) and the time between orders (T)?a) The Economic Order Quantity (Q) and the Annual Demand (D) are used to determine thenumber of Order (N)b) The number of orders (N) and the number of days that a firm works (W) are used to determinethe time span between orders (T)c) Orders are placed every T days unless the inventory on hand fall to or below the Reorder Pointd) Only a and be)f)Only b and cAll of a, b and c2.8 The objective of Inventory Management is to balance inventory investment (cost) and customerservice.a) TRUEb) False2.9 The Economic Order Quantity (EOQ), the number of orders, the Reorder Point (ROP), the timebetween orders are important analytics in Inventory Management.a) TRUEb) FALSE2.10The number of working days for a firm is an important input in calculating the components ofthe Economic Order Quantity (EOQ) and the Economic Production Quantity (EPQ).a) TRUEb) FALSE3. You are the Production Planner/Scheduler for the Delta Plumbing Company and your faucetmanufacturing facility has a production capacity of 20,000 faucets per year with an annuldemand of 15,000 faucets. Your factory oand for fi mai

Here, we know that Reorder point or ROP works in conjunction with the economic order quantity, the…

Answered: 2.7 Which of the following help explain…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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N7 The major types of inventory include raw materials, finished goods and: A. cleaning supplies B. work-in-process C. returned material D. defective goods E. pipeline inventory
Economic Order Quantity and Reorder PointFind the economic order quantity and the reorder point, givenAnnual demand ( D )= 1, 000 unitsAverage daily demand ( d¯ ) = 1, 000 ∕365ordering cost ( S ) = $5 per orde rHolding cost ( H ) = $1.25 per unit per yearLead time ( L ) = 5 daysCost per unit ( C ) =$12.50What quantity should be ordered?
Please do G,H,I,J,K and L (a) What is the expected jet fuel yearly average demand D? =4160 tons(b) Given D, find the order lot size Q that gives the economic order quantity (EOQ). =60.39 unit(c) Given the EOQ, what is the total inventory holding cost?= $1067695.2(d) Given the EOQ, what is the total inventory ordering cost? =OC=$1067726.4(e) Given the EOQ, what is the total annual inventory cost?TIC=2135421.6 =1.32(f) What is the time between orders in weeks? = 39.39 The airport is convinced that placing an order every season (every P = 13weeks) will be best. It is also aware that the expected demand will varywith a standard deviation of 20 tons, so it needs to take this information into account. (g) What is the protection period required by the proposed 13-week periodic review system?(h) The airport is required by the airlines to maintain a 99.75% service level.What is the required safety stock?(i) Calculate the order size (Q) when using P = 13.(j) What is the total annual inventory…
Using the gross requirements schedule below*, prepare an alternative ordering system that always orders 100 units the week prior to a shortage (a fixed order quantity of 100). What is the cost of this ordering system? D Period 1 2 3 Gross requirements 35 30 40 4 5 6 7 8 9 10 0 10 40 30 0 30 55 *Holding cost = $1/unit/week; setup cost = $100; lead time = 1 week; beginning inventory = 35 units. Prepare a net requirements plan (enter your responses as whole numbers). The holding cost of this ordering system is $ The setup cost of this ordering system is $ The total cost of this ordering system is $ Period Gross requirements On-hand at beginning of period 35 On-hand at end of period Net requirements Order receipt Order release (enter your response as a whole number). (enter your response as a whole number). (enter your response as a whole number). 1 35 2 3 30 40 4 0 7 8 9 10 0 30 55 5 6 10 40 30
Q2) Clancy's Motors has the following demand to meet for custom manufactured fuel injector parts. The holding cost for that item is $2 per month and each setup costs $80. Lead time is 0 months. Calculate the planned order releases using: (a) the EOQ technique, and (b) the POQ technique. And What are the costs of each plan, including the holding cost of any inventory left over after month 7? What technique performance is better. Month 1 2 3 4 5 6 7 Requirement 400 150 200 150 100 150 250 Answer: (a) The monthly holding cost = $2/month Average monthly demand = ??? units The EOQ = ??? units Total inventory held = ??? units Setup costs = $??? Holding cost = $???? Total cost = $???? (b) POQ Interval = ?.??, round to # month. Total inventory held = ? units Setup costs = $??? Holding cost = $? Total cost = $???
DETERMINING INVENTORY MODELS FSYHILD is a manufacturing company of made to order face shield. It is producing products at a constant rate with a requirement of 5,500 face shields per quarter throughout the year. If ordering costs are P35.00 per order, unit cost is P10.00 per face shield, and annual inventory holding cost are charged at 30% of the units cost. A. What is the EOQ for this component? B. What is the expected time between orders? C. What are the total annual inventory and holding cost associated with your EOQ recommendation? D. Assuming a lead time of 5 days, what is the reorder point? E. What is the total cost if the management decides to increase the demand by 75%?
6. A company stocks an item that is consumed at the rate of 20 units each day. Every time an order is placed for new supply, $ 100 must be paid. A unit inventory held in stock for one week will cost $ 0.15. Lead time is 3 days. a. What is the economic order quantity (EOQ)? b. What is the cycle time for the EOQ? c. What is the total cost for the EOQ? d. What is the total cost if the order quantity is 300 more than EOQ? e What is the optimum number of orders (rounded to the closest integer) that the company has to place each year? f What is the level of inventory at the reorder point? Assume that the company has a standing policy of not allowing shortages in demand.
4. a. Categorize and define the inventory costs. b.The material DX is used uniformly throughout the year. The data about annual requirement, ordering cost and holding cost of this material is given below: Annual requirement: 2,400 units Ordering cost: $10 per order Holding cost: $0.30 per unit Calculate • EOQ • average inventory • number of orders per year length of order cycle and total cost.
The two most important inventory-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 itemto 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 theorder should be placed.
Fill in the blanks in the following Inventory Record using POQ inventory policy assuming: Lead Time 50, and scheduled receipts of 40 in week 1 A = 2, P=3, on hand inventory LT= Quantity= Lot Size = On hand = 2 P=3 50 = Gross requirements Scheduled receipts Projected on hand Planned-order receipts Planned-order releases B D 1 90 40 2 D 3 20 A 4 40 5 6 60 C 7 B co 8 60
Walrus Company has the following information available concerning one of its inventory items: Cost of placing an order $30.00 Unit carrying cost per year $3.00 Annual unit demand 6,625 Safety stock 125 Average daily demand 25 Normal lead time in days 10 If there is a delay in shipping the item, approximately how many days can be covered by the safety stock? a.5 days b.110 days c.26 days d.31 days
Epworth Co. predicts that it will use 360,000 gallons of material during the year. It anticipates that it will cost $72 to place each order. The annual carrying cost is $4 per gallon. a. Determine the most economical order quantity by using the EOQ formula. b. Determine the annual order and carrying costs at the EOQ point.

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