each year = Expected Annual Usage Actual EOQ Supplier A: 1500 units = 7.117 209 EOQ Supplier B: 1500 units = 10.14 148 EOQ b. What is the reorder point (in units) for each supplier? Assume for now that no safety stocks are held and use a 360-day year. Reorder Point = (Daily Usage Rate)(Delivery Time) Supplier A: (1500
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that can be used in inventory control? Answer: There are several types of reordering systems‚ in this module we discussed three. The fixed order quantity uses fixed quantities of goods ordered at various order points to replenish inventory. The fixed order period use fixed times of reorder with various order quantities to replenish
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Introduction In the course of Operations Management was given to us a Harvard Business case study‚ “Blanchard Importing and Distributing Co.‚ Inc”. The company is a liquor distributer and bottler which‚ is struggling with inventory management problems. The aim of our work is to help the trainee‚ Hank Hatch‚ analyzing the company’s scheduling system and present recommendations with the purpose of solving problems intrinsically related with Inventory management. Firstly‚ we are going to
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assumptions are implied in the EOQ model? Do these assumptions appear reasonable when applied to Narragansett Yacht? How many orders should be placed each year if Narragansett buys from Supplier A? If the firm buys from Supplier B? What is the reorder point (in units) for each supplier? Assume for now that no safety stocks are held and use a 360-day year. Calculate the total inventory cost (the cost of ordering plus the cost of carrying inventories) that Narragansett would incur from each supplier
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for this component? b. What the cycle time in months? c. What are the total annual inventory holding and ordering costs associated with your recommended EOQ? d. Assuming 250 days of operation per year and a lead time of 5 days‚ what is the reorder point for the XYZ Company? 6. Suppose that XYZ’s management likes the operational efficiency of ordering in quantities of 1‚000 units and
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ECONOMIC ORDER QUANTITY AND IT’S IMPLMENTATION IN BUSINESS Any business man‚ executive‚ and entrepreneur should know the basic tools for a company to develop in the market‚ regardless how big the business is‚ there are many factors involve. It is very important in every business to handle well developed financial and logistics processes. In order for a company to handle a correct logistic‚ without matter if it is a goods or services company‚ it is necessary to identify many factors. Some of
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OPERATIONS MANAGEMENT B3401 ASSIGNMENT # 3 (Total 100 points) Due on Nov 16 2010 (Tuesday) (Write your name‚ student #‚ section # in which you are registered) Q1. (Total 20 points) The FS factory can produce wieners at a rate of 5‚000 per day. FS supplies wieners to local stores at a steady rate of 250 per day. The cost of preparing the equipment for producing wieners is $22. Annual holding costs are 15 cents per wiener. The factory operates 300 days a year. Find: 1) The optimal total
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$50.00 $400 per set-up 4. & 5. a. Order from Supplier - EOQ model Ch = IC = 0.22 ($18.00) = $3.96 [pic]units Number of orders = D/Q = 9.19/year Cycle time = 250(Q) / D = 250(348.16) / 3200 = 27.2 days Reorder Point: P(Stockout) = 1 / 9.19 = 0.1088 r = 64 + 1.24(10) = 76.4 Safety stock = 76.4 - 64 = 12.4 Maximum inventory = Q + 12.4 = 360.56 Average inventory = Q/2 + 12.4 = 186.48 Annual holding cost = 186.48(3.96) = $738.46 Annual
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Zaragoza might just be the better option. Calculations: All the calculations for Economic order quantity‚ Reorder Point and Safety stock are given in appendix 2. The EOQ is calculated using the standard EOQ formula. For the formula we take the fixed costs to be the cost that is paid at the ports for order processing. This cost is 335 for Rotterdam and 305 for Zaragoza. For calculating the reorder point we first calculated the average performance time. This includes time spent by the order on port‚ Time
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order to derive some data for estimates. Annual demand = D = 439 Cost of Bicycle at whole sale (C) = 0.60*170 = $102 Carrying cost (H) = 12% of cost = 102 *.12 = 12.24 Ordering cost (S) = $65 per order Lead time = 4 weeks Re order point = ROP = daily demand x lead time (days) = 439/365 * 28 = 33.67 EOQ Formula Order quantity Q = Sqrt (2DS / H) = Sqrt ( 2 * 439 * 65 / 102 *.12 ) = Squrt ( 4662.58) = 68.28 Number of orders per year
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