CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity. Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem: Price of copper $ 0.82 per pound up to 2,999 pounds Annual demand Holding cost Ordering cost $ 0.81 per pound for orders between 3,000 and 5,999 pounds $ 0.79 per pound for orders 6,000 pounds or greater 48,000 pounds per year 30 percent per unit per year of the price of the copper 30 Which quantity should be ordered? Quantity pounds

CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity. Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem: Price of copper $ 0.82 per pound up to 2,999 pounds Annual demand Holding cost Ordering cost $ 0.81 per pound for orders between 3,000 and 5,999 pounds $ 0.79 per pound for orders 6,000 pounds or greater 48,000 pounds per year 30 percent per unit per year of the price of the copper 30 Which quantity should be ordered? Quantity pounds

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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CU Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price break and other data for the problem. Price copper $ .81 per pound up to 2,499 pounds .80 2,500-4,999 pounds .78 5,000 pound or greater Annual demand 51,000 pounds per year Holding cost 30 % per unit/yr. Of the price of copper Ordering cost $ 30 Which quantity should be ordered?
Barbara Flynn's company has compiled the following 12.5 ata on a small set of products: ITEM A B C D E ANNUAL DEMAND ITEM NUMBER E102 D23 D27 R02 R19 $107 $123 U11 U23 V75 100 75 50 200 150 Perform an ABC analysis on her data. PX 12.6 Lynn Fish opened a new beauty-products retail store. There are numerous items in inventory, and Lynn knows that there are costs associated with inventory. However, because her time is limited, she cannot carefully evaluate the inventory policy for all products. Lynn wants to classify the items according to dol- lars invested in them. The following table provides information about the 10 items that she carries: UNIT COST $300 100 50 100 65 UNIT COST $4 $16 $8 $2 $8 $12 $1 $7 $1 $14 DEMAND (UNITS) 800 2,400 700 1,000 200 500 1,200 800 Use ABC analysis to classify these items into categories A, B, and C. PX 1,500 2,500 Problems 12.7-12.40 relate to Inventory Models for Independent Demand • 12.7 William Beville's computer training school, in Richmond, stocks…
A company plans to consume 700 pieces annually of a particular component. Past records indicate that its purchasing department spent $12,500 for placing 15,000 purchase orders. The average inventory was valued at $50,000 and the total storage cost was $7,500, which included wages, rent, taxes, insurance etc. related to store department. The company borrows capital at 10 per cent a year. If the cost of the component is Rs. 12 and lot size is 10, determine the; Storage expenses/year Capital cost /year Total cost/year
Reorder PointConsider an economic order quantity case where annual demand D = 1,000 units, economic order quantity Q = 200 units, the desired probability of not stocking out P = .95, the standard deviation of demand during lead time σL = 25 units, and lead time L = 15 days. Determine the reorder point. Assume that demand is over a 250-workday year.
Beth Perry purchases strawberries for P4.00 a case and sells them for P9.00 a case. The rather high mark-up reflects the perishability of the item and the great risk of stocking it, the product has no salvage value after the first day it is offered for sale. Beth faces the problem of how many order for tomorrow's business. A 90-day observation of past demand is shown in Table below. Find the stock level (in cases) of strawberries that Beth must buy to have a maximum profit. No. of Days Daily Demand Demanded 10 9. 11 27 12 36 13 18 90
Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?
Suppose the College of Engineering is planning to sell merchandise this year. They don't know how many students will be interested or how many will sell, so they've received three quotes for orders of different sizes. Assume the relationship is linear or best fit. a) What is the fixed cost? ✔ [ Select] 300 200 250 500 would cost, based on the above calculations? b) What are the Variable c) If the merchandise is v Small Order Medium Order Large Order Units 250 500 1000 [Select] Cost Quote $5,000.00 $9,500.00 $18,900.00 they need 1,500 units, what do you predict it d) If the College of Engineering were to receive an offer from a different producer for a flat rate of $19 per shirt, what would be the breakeven point between the two scenarios (round to the nearest 10 units)? [Select]
Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 36 units per day Average lead time = 50 days Item unit cost = $70 for orders of less than 400 units Item unit cost = $68 for orders of 400 units or more Ordering cost = $45 Inventory carrying cost = 25% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time. Calculate EOQ if unit cost is $70 and $68. (Note: These EOQs do not need to be feasible in theirprice range.) (Round up your answers to the next whole number.) EOQ Unit cost at $70 units Unit cost at $68 units Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Annual Ordering Cost Unit cost at $70 Unit…
Peter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. a) How much safety stock should be used for a 95% service level? b) If the weekly demand is 186 and there is a 1.5 week lead time - what is the reorder point (95% service level)? c) How much safety stock should be used for a 99% service level? solve using excel
Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days, and Bulldogs Co. holds 2,400 boxes of paint as safety stock. If the company orders 2,000 boxes of chocolate per order, what is the cost of carrying inventory? A. P8,160 B. P5,280 C. P5,760 D. P2,400
Even if we have substantial uncertainty in the parameters in the EOQ-model, it is still quite a useful model. Why?