Q1 – 1 consider the case of popular cereal that has an annual demand of 80,000 cases. Fixed cost of ordering is $40 for the specific cereal, and the wholesale price is $2 per case. Annual inventory holding cost is 10% of the wholesale price. Then, what is the EOQ for this particular cereal? Please provide an integer number. (Note that EOQ should be in integers in this case, since you cannot order half a cereal case.) Answer : __________________________ Q1 – II An allergy products superstore sells 500 of their most popular model of air filters each month. The cost of ordering and receiving shipments is $20 per order. Accounting estimates that annual inventory holding cost is $6. The store operates 240 days per year (operating days). The supplier lead time is 2 operating days. Each order is received from the supplier in a single delivery. There are no quantity discounts. (i)What quantity should the store order with each order? Please provide an integer number. Answer : __________________________ (ii) How many times per year will the store order? Answer : __________________________ (iii) How many operating days will elapse between two consecutive orders? Answer : __________________________ (iv) Suppose the lead time is 2 operating days, and that the superstore wishes to maintain in-stock probability of 90%. The demand in each day is normal distributed with standard deviation 10, and the demands cross 2 days are independent. What is the re-order point? (Hint: The z-score for 0.9 is 1.28.) Answer : __________________________ (V) What is the store’s minimum total annual cost of placing orders & carrying inventory? Answer : __________________________
1 – IIIA T-shirt manufacturer started a new production plant. The plant manager wishes to optimize the inventory costs of the company’s best-selling shirt. The annual demand for the shirt is 12,000 and the plant works 240 days per yr. The plant can produce the shirt at a rate of 100 shirts per day. The cost to prepare the equipment to start a production run is $100 and the annual inventory carrying cost is $3.6 per year. (i)What should be the optimum quantity of shirts to produce? Answer : __________________________ (ii) What is the maximum inventory achieved during a production run? Answer : __________________________ (iii) How many production runs are needed to meet the annual demand? Answer : __________________________ (iv) What is the average inventory of shirts? Answer : __________________________ (V) What is the total annual cost of production setups? Answer : __________________________
PS- All question is from EOQ(Economic order Quantity) Please provide steps involve for answer for my understanding.
1 – IIIA T-shirt manufacturer started a new production plant. The plant manager wishes to optimize the inventory costs of the company’s best-selling shirt. The annual demand for the shirt is 12,000 and the plant works 240 days per yr. The plant can produce the shirt at a rate of 100 shirts per day. The cost to prepare the equipment to start a production run is $100 and the annual inventory carrying cost is $3.6 per year. (i)What should be the optimum quantity of shirts to produce? Answer : __________________________ (ii) What is the maximum inventory achieved during a production run? Answer : __________________________ (iii) How many production runs are needed to meet the annual demand? Answer : __________________________ (iv) What is the average inventory of shirts? Answer : __________________________ (V) What is the total annual cost of production setups? Answer : __________________________
PS- All question is from EOQ(Economic order Quantity) Please provide steps involve for answer for my understanding.
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