At sejahtera.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 five working days after an order has been placed. The backordering is not allowed. Assume 300 working days a year. a. calculate sejahtera.com’s optimal order quantity. b. calculate the optimal number of orders per year c. Calculate the optimal interval (in working days) between orders.

At sejahtera.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 five working days after an order has been placed. The backordering is not allowed. Assume 300 working days a year. a. calculate sejahtera.com’s optimal order quantity. b. calculate the optimal number of orders per year c. Calculate the optimal interval (in working days) between orders.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
A restaurant uses 5,000 quart bottles of ketchup each year. The ketchup costs $3.00 per bottle and is served only in whole bottles because its taste quickly deteriorates. The restaurant figures that it costs $10.00 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes 3 weeks for an order to arrive. The restaurant operates 50 weeks per year. The restaurant would like to use an inventory system that minimizes inventory cost. The restaurant has figured that the most economical order size or EOQ is approx. 409 (rounding up the decimals). Suppose that things have become uncertain and that customer demand is no more constant. Customer demand is now normally distributed with mean being the same as given in the problem description and standard deviation = 30 units per week. The supply source is still very reliable and as a result the lead time is constant. Find out the safety stock needed to achieve 95% customer service level. O 55 65 075 85 None of…
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?
The owner and manager of a hardware store reevaluates his inventory policy for hammers. sells an average of 50 hammers a month, so you have placed purchase orders for 50 hammers with a distributor at a cost of $20 each at the end of each month. But the owner does not place all the store orders and find that this takes much of your time. He estimates that the value of his time spent ordering hammers is $75. a) What must be the unit cost of maintaining hammers for the current policy of the hardware store to be Optimal according to the EOQ model? b) If the distributor delivers an order for hammers in 5 business days (out of an average of 25 per month), what should be the reorder point, according to the EOQ model?
You are managing a company that stocks and distributes hardware. Thecompany employs two purchasing agents who receive combined salaries of$90,000. They process 6,000 purchase requests per year. Average inventoryin storage is $600,000, and the total cost of running the warehouse is$200,000. You are told that the company purchases 5,000 hammers per yearat a cost of $5.34 per hammer.a. Using the economic order quantity (EOQ) formula, how many hammersshould be ordered at one time?b. If the hammer vendor stated that it would charge $5.00 per hammer if youordered 200 or more at a time, what should you do?
Hayes Electronics assumed with certainty that the ordering cost is $450 per order and the inventory carrying cost is $170 per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters: (a) Both ordering cost and carrying cost are 10% less than originally estimated, (b) both ordering cost and carrying cost are 10% higher than originally estimated, (c) ordering cost is 10% higher and carrying cost is 10% lower than originally estimated, and (d) ordering cost is 10% lower and carrying cost is 10% higher than originally estimated. Determine the optimal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values.
Henderson Furniture sells reproductions of 18th-century furniture. For a particular table, the assumptions of the inventory model with backorders are valid. Annual Demand: D = 200 tables per year Inventory holding cost (as a percent of the item cost): 1 = 25% per year Item cost: C = $800 per table Ordering cost: Co = $80 per order Backordering cost: Cb = $50 per table per year The store is open 250 days a year. What is the economic order quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number. ○ A. 28 B. 5 ○ C. 13 OD. 23 E. 14 QUESTION 4 What is the backorder quantity that will minimize the total cost? Results are expected to be rounded to the nearest whole number. ○ A. 14 B. 23 C. 13 OD. 28 ○ E. 5
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?
Hayes electronics assumed with certainty that the ordering cost is $450 per order and the inventory carrying cost is $170 per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters as follows: (a) both ordering cost and carrying cost are 10% less that originally estimated, (b) both ordering cost and carrying cost are 10% higher than originally estimated, (c) ordering cost is 10% higher and carrying cost is 10% lower than originally estimated, and (d) ordering cost is 10% lower and carrying cost is 10% higher than originally estimated. Determine the optimal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values.
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.a. What is Dot Com’s optimal order quantity?b. What is the optimal number of orders per year?c. What is the optimal interval (in working days) between orders?d. What is demand during the lead time?e. What is the reorder point?f. What is the inventory position immediately after an order has been placed?
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?
It takes approximately 2 weeks (14 days) for an order of steel bolts to arrive once the order has been placed. The demand for bolts is fairly constant; on the average, the manager, Michelle Wu, has observed that the hardware store sells 500 of these bolts each day. Because the demand is fairly constant, Michelle believes that she can avoid stockouts completely if she orders the bolts at the correct time. What is the reorder point? The reorder point is? units (enter your response as a whole number).