into consideration some of the factors discussed in question 2‚ 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
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molly screws would be normally ordered. Answer Summary Solution contains calculations of : 1. EOQ 2.Carrying cost. 3. Ordering cost. 4. the optimal time between placement of orders . Answer Preview ...Annual usage/EOQ = 15‚000/5620 = 2.669 or 3 orders Ordering cost = number of orders*per order cost = 2.669*$100 = $266.9 (Note that inventory and ordering costs are same confirming optimality of the EOQ) Annual cost = $266.95 + $266.9 =
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examine the existing inventory management and cost evaluation methods applied and to recommend an inventory management systems that enable Kaliti Foods S.C has the best cost minimizing raw material order quantity‚ known as the Economic Order Quantity (EOQ). 1 Unity University-Quantitative Methods for Decision Making Inventory Management System-Particular focus on Economic Order Quantity A case of Kaliti Food Share Company CHAPTER ONE 1.1. Introduction Inventory is generally defined as
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do you see alternatives to the popular ABC classifications? The alternatives would be that by minimizing the sums of the set-up cost and carrying-cost‚ you would also minimize the overall costs. 5. Explain the major assumptions of the basic EOQ model. 1. Demand for an item is known‚ reasonably constant‚ and independent of decisions for other items. 2. Lead time‚ the time between placement and receipt of the order‚ is known and consistent. 3. Receipt of inventory is instantaneous and complete
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Chapter 12 Inventory Management Multiple Choice Questions 60. Which of the following is not one of the assumptions of the basic EOQ model? A. Annual demand requirements are known and constant. B. Lead time does not vary. C. Each order is received in a single delivery. D. Quantity discounts are available. E. All of the above are necessary assumptions. Difficulty: Medium TLO: 6 Taxonomy: Knowledge 61. Which is an application for RFID tags? A. Monitoring the temperature of fruit
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MgtOp 340 Exam 2 EOQ Suppose that JJ Inc. has a production rate of 250‚000 units per year and a demand of 800 per day. JJ has a setup cost of $40‚ and a holding cost percentage of 25%. JJ sells their product for $50 and it costs them $30 to produce it. If JJ works for 250 days per year‚ what is the optimal batch size? p=(250‚000/250days)=1‚000 P=250‚000(production rate) d=800 D=(800*250days)=200‚000 S=$40 I=.25 c=$30 H=(.25*30)=7.5 Optimal batch size => sqrt([2DS/H(1-d/p)]
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inventory to meet their competitive priorities. The only relevant costs considered in this chapter are ordering costs‚ holding costs‚ and stockout costs. In the economic order quantity (EOQ) model‚ costs of placing replenishment orders tradeoff against the costs of holding inventory. Under the assumptions of the EOQ‚ average inventory is one-half of the order quantity. The number of orders placed per year varies inversely with order quantity. When we consider stockout costs‚ an additional inventory
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Operations Management Assignment 3 Q:Difference between different types of EOQ. Economic Order Quantity: The economic order quantity (EOQ) is the fixed order quantity (Q) that minimizes the total annual costs of placing orders and holding inventory (TC). This type of model is used when i) Demand is independent. ii) Compute how much to order. Economic Production Quantity: The economic production quantity (EPQ) is the production quantity (lot size) that minimizes the total annual
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cost of XL-20 purchases (i.e. the quantity purchased multiplied by the price). 3 Orders per year: Number of orders per year = = annual requiremen t order quantity 4 4 800 8 600 Using the new cost data: (a) EOQ = (2) (annual requiremen t) (cost per order) annual carrying cost per unit = (2)(4 800)($30) $20 = (b) Number of orders per year = 14 400 = 120 annual requiremen t order quantity = 40 4 800 120 PROBLEM
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INVENTORY MANAGEMENT * Types of Inventory * Inventory Costs * Independent – Demand Items and Inventory Costs * Inventory Monitoring * Production Management Systems * Other Issues in Inventory Management What is Inventory? * An investment in the sense that it requires that the firm tie up its money‚ thereby forgoing certain other earnings opportunities. * The higher a firm’s average inventories‚ the larger the dollar investment and cost required and vice
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