Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 10, Problem 26P
a
Summary Introduction
Interpretation:
Combined annual holding and ordering cost.
Concept Introduction: Inventory management is the process of managing the company’s stock so that there are no stock-outs. It includes ordering, storing, managing the stock.
b
Summary Introduction
Interpretation:
Number of SKU 005 to be ordered to minimize combined ordering and holding costs.
Concept Introduction: Materials Requirement Planning is a process in which planning is made for the requirement of raw material required for the manufacturing of the finished products.
c
Summary Introduction
Interpretation:
Number of SKU 005 to be ordered.
Concept Introduction: Materials Requirement Planning is a process in which planning is made for the requirement of raw material required for the manufacturing of the finished products.
d
Summary Introduction
Interpretation:
Reorder point of SKU 005.
Concept Introduction: Materials Requirement Planning is a process in which planning is made for the requirement of raw material required for the manufacturing of the finished products.
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Students have asked these similar questions
The demand for a particular part called SKU 005 is 1,200 units a year. The cost of one SKU 005 is
$40.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory
carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005
is used.
Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days
to deliver that order. What should the purchasing manager's reorder point be?
O A. 24
O B. 36
O C. 30
O D. 5
O E. 12
6000 units of a part are needed every year. Currently, this part is manufactured internally. Each production run costs 500 dollars to set up. The part costs 5 dollars. The carrying cost is 10% per year. The company has the option of ordering this part from another company. This would increase the part’s cost to 6 dollars, although the fixed cost of ordering would be low at 300 dollars per order. Should the company continue manufacturing the part, or order it? Show your calculations.
The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is
$64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory
carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005
is used.
What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005?
OA. $2050
O B. $1360
O C. $1697
O D. $825
O E. $1200
Chapter 10 Solutions
Practical Operations Management
Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4P
Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - Prob. 18PCh. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 2.1QCh. 10 - Prob. 2.2QCh. 10 - Prob. 2.3QCh. 10 - Prob. 2.4QCh. 10 - Prob. 3.1QCh. 10 - Prob. 3.2QCh. 10 - Prob. 3.3QCh. 10 - Prob. 3.4Q
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