currently running at 2% of cost. Joe pays his secretary/bookkeeper $7.50 per hour. Joe’s secretary can place an order in 15 minutes with materials and overhead cost of $15.00 per order. Records show‚ weekly pizza sales as follows: Weekly Pizza Sales Week Sales(units) 1 475 2 515 3 525 4 500 5 485 2 a. How many units should Joe order? b. How often should Joe place each order? c. What is the minimum TIC? 3 Suppose R & B Beverage Company has a soft-drink product that has a constant
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Costs Costs of Inventory Holding Costs ◦ The costs of holding or “carrying” inventory over time Ordering (Setup) Costs ◦ The costs of placing an order and receiving goods ◦ The costs to prepare a production run for manufacturing an order Shortage Cost ◦ The costs of losing revenue or goodwill if an The order is not satisfied. Purchase Cost? Holding Holding Costs Category Cost (and Range) (and Range) as a Percent of Inventory Value Housing costs
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Managing Business Operations Case Analysis: Blanchard Importing and Distributing Co. Inc. (HBS Case 9 - 673 - 033) Submitted by: Tushar Kothavale (130) NMIMS‚ FT MBA 2009-2011 1) Correct the Economic Order Quantity (EOQ) and Reorder point (ROP) quantities for each of the five items mentioned in the case. We first predict the annual demand for the year 1972 based on trend for 4 months of 1972 based on corresponding months of 1971. Calculations for Annual demand (R): The assumption made here is
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calculate the EOQ and ROP quantities based on 1971’s demand‚ then we compare this values with the ones obtained upon the implementation of the Scheduling system‚ in 1969‚ as well as with the scheduling system invented by Bob and Elliot . We are also going to approach the differences between the formal and the informal systems‚ choosing the best one for the company and finally present our recommendations which are aimed to solve the detected problems. Economic Order Quantity Model Operations Managers
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storage areas in order to place orders or control losses. Factory managers need to know how many units of their products are available for customers orders. Restaurants need to order more food based on their current supplies and menu needs. All of these business rely on an inventory count to provide answers. The word ‘Inventory’ can refer to both the total amount of goods and act of accounting them .Many companies take an inventory of their supplies on a regular basis in order to avoid running
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be an appropriate re-order point? Re-order point = demand during lead time = 100 units/day * 4 days = 400 units. 2. Montegut Manufacturing produces a product for which the annual demand is 10‚000 units. Production averages 100 per day‚ while demand is 40 per day. Holding costs are $1.00 per unit per year; set-up costs $200.00. If they wish to produce this product in economic batches‚ what size batch should be used? What is the maximum inventory level? How many order cycles are there per
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the following all units’ quantity discount schedule and calculated EOQ’s. Units Ordered Price Per Unit EOQ at that Price 0-499 $134.00 520 500-1‚499 $122.00 1200 2‚000-3‚999 $120.00 3400 4‚000-5‚999 $116.00 3900 >=6‚000 $110.00 5000 The total annual costs of exactly which order quantities must be checked to determine the optimal solution? *{3400‚4000‚6000} Consider a company that uses a continuous review system. They currently have 0 units of inventory on have‚ an order of 500 schedule to arrive
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demand: 5‚000 cases of cards Case value (price): $200 each Inventory carrying cost (annual): 28% Cost per order to replenish inventory: $100 In-transit inventory carrying cost: 18% Transit time using motor carrier: 2 days Motor time carrier rate: $0.80 per cwt. (100 lbs.) Air carrier time: $1.50 per cwt. Unit weight: 50 lbs. per case Questions - 1. What is the economic order quantity for BBE in units? In pounds? 2. What would the total cost (not considering transportation-related costs)
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retailer and a single wholesaler in a two-period newsboy problem. Two models are discussed‚ a single-buying-opportunity model and a two-buying-opportunity model. We discuss how the revenue sharing ratio and the wholesale prices are to be determined in order to achieve channel coordination and a win-win outcome. We find that the wholesale prices are set to be lower than the retail prices and the optimal revenue sharing ratio is linearly increasing in the wholesale prices. The proposed revenue sharing contract
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Obersport is responsible for fabric and component sourcing for Sport Obermeyer’s entire production in the Far East. The materials are then cut or sewn either in Raymond Tse’s own “Alpine” factories or by independent subcontractors. Sport Obermeyer’s orders represent about 80 percent of Alpine’s annual production volume. + Paragraph – highlight of answers Overview of Relevant Facts + Add paragraph – need results/answers from other group partners Case Answers 1. Forecasting is arguably
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