Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 45% of the $9 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $☐ per order (round your response to two decimal places).

Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 45% of the $9 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $☐ per order (round your response to two decimal places).

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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Leilani Lavender's law office has traditionally ordered ink refills 65 units at a time. The firm estimates that carrying cost is 45% of the $9 unit cost and that annual demand is about 235 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? Part 2 a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $___per order
2. Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 35% of the $9 unit cost and that annual demand is about 245 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? Part 2 a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $enter your response here per order (round your response to two decimal places). b) If the true ordering cost turns out to be much greater than your anser to part (a) what is the impact on the firm's ordering policy?
Consider again the kitty litter ordering policy for Sam’s Pet Hotel in Problem 13. Suppose that the weekly demand forecast of 90 bags is incorrect and actual demand averages only 60 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? Suppose that actual demand is 60 bags but that ordering costs are cut to only $6 by using the Internet to automate order placing. However, the buyer does not tell anyone, and the EOQ is not adjusted to reflect this reduction in S. How much higher will total costs be, compared to what they could be if the EOQ were adjusted?
The carrying cost curve and ordering cost curve of NEKO Inc.’s inventory intersect at 3,500 units. What is the total annual cost of inventory given that the annual demand is 75,000 units and the carrying cost per unit per year is P12
The Cover-up Drapery Company carries four types of fabric with the following characteristics: Type Annual Demand (yards) Item Cost per Yard 1 300 $20 2 250 $18 3 100 $12 4 200 $ 8 Assume that the items are to be ordered together from the same supplier at an ordering cost of $20 per order and an annual carrying cost of 20 percent. Also assume 300 working days in a year. a. If a P system is used, what is the optimal ordering interval in days? b. How much of each type of carpet would be ordered when a combined order is placed? c. What is the effect on the ordering interval of changing the carrying cost to 25, 30, and 35 percent? d. Why can’t these carpets be ordered by using a Q system? e. Classify the…
Happy Pet, Inc., is a large pet store located in LongBeach Mall. Although the store specializes in dogs, it a lso sellsfish, turtle, and bird supplies. The Everlast Leader, a leather leadfor dogs, costs Happy Pet $7 each. There is an annual demand for6,000 Everlast Leaders. The manager, Stephan Wagner, has determinedthat the ordering cost is $20 per order and the carrying cost,as a percentage of unit cost, is 15%. Happy Pet is now consideringa new supplier of Everlast Leaders. Each lead would cost only$6.65, but, in order to get this discount, Happy Pet would have tobuy shipments of 3,000 at a time. Should Happy Pet use the newsupplier and take this discount for quantity buying?
The EOQ model with quantity discounts attempts todetermine:a) the lowest amount of inventory necessary to satisfy acertain service level.b) the lowest purchase price.c) whether to use a fixed-quantity or fixed-period orderpolicy.d) how many units should be ordered.e) the shortest lead time
A local distributor for Hankook tires Company expects to sell 12,600 R14 radial tires nest year. The estimated cost of keeping a R14 tire per annum is ȼ126 and ordering cost is ȼ70. a) What is the optimal order quantity? b) How many times per year does the distributor order R14 tires? c) What is the length of an order cycle, if the company does not operate on Saturdays and Sundays? d) What is the annual total cost if the optimal quantity is ordered?
The maintenance department of a large hospital uses about 816 cases of liquid cleanser annually. Ordering costs are $12, carrying costs are $4 per case a year, and the new price schedule indicates that orders of less than 50 cases will cost $20 per case, 50 to 79 cases will cost $18 per case, 80 to 99 cases will cost $17 per case, and larger orders will cost S16 per case. Determine the optimal order quantity and the total cost Show your result on diagram with order quantity on X axis and cost on Y axis.
Henry Crouch's law office has traditionally ordered ink refills 50 units at a time. The firm estimates that carrying cost is 40% of the $9 unit cost and that annual demand is about 240units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of per order (round your response to two decimal places). b) If the true ordering cost turns out to be much greater than your answer to part (a), what is the impact on the firm's ordering policy? A. The order quantity should not be changed. B. The order quantity should be increased. C. The order quantity should be decreased.
Enrun Corporation expects to order 140,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $300 per order; the purchase price per chip is $20; and the firm’s inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.) What is the economic ordering quantity for chips? If Enrun holds a safety stock equal to a 30-day supply of chips, what is its average inventory level? Assume that Enrun holds a safety stock equal to a 30-day supply of chips. What is the maximum amount of inventory that Enrun will have on hand at any time, that is, what will be the inventory level right after a delivery is made?
Henry Crouch's law office has traditionally ordered inkrefills 60 units at a time. The firm estimates that carrying cost is 40%of the $ 10 unit cost and that annual demand is about 240 units peryear. The assumptions of the basic EOQ model are thought to apply.a) For what va lue of ordering cost would its action be optimal?b) If the true ordering cost turns out to be much greater than youranswer to (a), what is the impact on the firm's ordering policy?