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Assignments For Week 6

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aishwaryaanand2003
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8 views2 pages

Assignments For Week 6

Uploaded by

aishwaryaanand2003
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Questions:

1. Please respond to the weekly forum 7 provided in Week 7.


2. A phone company has annual demand of 10,000. A component has annual holding cost of $6
per unit, and ordering cost of $75. Calculate EOQ, Total Cost, number of orders per year and
the order cycle time (Consider 250 workday per year).
3. A tire store expects to sell approximately 100 all-season tires of a certain make, model, and
size next year. Annual holding cost is $10 per tire and ordering cost is $20 per order. The store
operates 360 days a year and has enough storage space in the back.
a. What is the EOQ?
b. How many times per year would the store reorder if EOQ units are ordered each time?
c. What is the length of an order cycle if EOQ units are ordered each time?
d. What is the total annual inventory control cost if EOQ units are ordered each time?
4. A distributor of security monitors purchases 3600 monitors a year from the manufacturer at
the cost of $65 each. Ordering cost is $30 per order and annual holding cost rate is 20 percent
of the unit cost. Calculate the optimal order quantity and the total annual cost of ordering and
holding the inventory.
5. In a small repair shop, the usage of a specific nut is two nuts per day. The order is delivered to
this repair shop seven days after it is called in. At what point should the repair shop reorder?
6. The following table contains the monthly usage and unit costs for a random sample of 15 items
from a list of 2000 inventory items at a health care facility.
Item Unit Cost Monthly Usage
K34 10 200
K35 25 600
K36 36 150
M10 16 25
M20 20 80
Z45 80 700
F14 20 300
F95 30 800
F99 20 60
D45 10 550
D48 12 90
D52 15 110
D57 40 120
N08 30 40
P05 16 500

2
a. Develop an A-B-C classification for these items.
b. How could the manager use this information?
c. After reviewing your classification scheme, suppose that the manager decides to place item
P05 into the A category. What are some possible explanations for this decision?

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