to replenish stock is $10 and the annual cost of holding is $4 per book. Stock is received five working days after an order has been placed. No backordering is allowed. Assume 300 working days a year. a. What is Dot Com’s optimal order quantity (EOQ)? b. What is the optimal number of order per year? c. What is the optimal interval (in working days) between orders? d. What is the demand during the lead time? 2. Leaky Pipe‚ a local retailer of plumbing supplies‚ faces demand for one of its
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CHAPTER 4: MANAGEMENT OF CURRENT ASSETS MANAGING MANAGING INVENTORY EOQ MODEL Reorder Point ABC System Just-in-Time System EOQ = √2 X S X O / H S = no of usage per period Ordering Cost Admin cost to place O = cost per order and receive order H = cost of holding the Holding Cost Variable cost/unit to stocks per period hold the stocks EOQ =number of unit to order per THC = O X (S/EOQ) + H X period. (EOQ/2) ROP = level of stock (in unit) to reach before reorder the stocks
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1. What is the economic order quantity for BBE in units? In pounds? 2. What would the total cost (not considering transportation-related costs) of the EOQ? 3. What is the total cost for using motor carrier transportation? 4. What is the total cost for using air carrier transportation? 5. Which alternative should BBE use? Solution 1. EOQ = sqrt (2*DS/H) = sqrt ((2*5000*100)/(0.28*200) = 133.63 = 134 cases = 134*50 =6700 pounds 2. Total Cost = 134*200 + [5000/134]*100 + 134/2*0.28*200 =
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of inventory and inventory turnovers ◊Understand ABC classification‚ ABC inventory matrix and cycle counting. ◊Know RFID and how it can be used in inventory management ◊Understand the EOQ model and its underlying assumptions ◊Understand the Quantity Discount and the EMQ Models and their relationships with the basic EOQ model ◊Understand and be able to distinguish among the various statistical ROP models ◊Understand the continuous review and periodic review systems ●”Optimal” means a high level of customer
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What is a pedophile? A pedophile is a person who has a sustained sexual orientation toward children‚ generally aged 13 or younger‚ Blanchard says. Not all pedophiles are child molesters (or vice versa). "Child molesters are defined by their acts; pedophiles are defined by their desires‚" Blanchard says. "Some pedophiles refrain from sexually approaching any child for their entire lives." But it’s not clear how common that is. Does the medical community consider pedophilia to be a mental
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University The Cousin’s Tournament A Case Study Introduction Grandview Industries‚ the Blanchard family’s crown jewel and legacy since 1934 is about to enter into it’s third generation of leadership. Unfortunately the second generation leader‚ Al Blanchard‚ at age 67‚ has done very little preparation in planning for a successor and wants near immediate exit. The 200 million dollar company employs 2‚000 people across California
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CHAPTER 9: INVENTORY MANAGEMENT 1. What is inventory turnover? How can a high inventory turnover ratio be detrimental to a firm? Inventory turnover refers to the number of times that inventory is sold in a one year period. It can be calculated by dividing the cost of goods sold for a particular period by the average inventory for that period. High inventory turnover may signal a low level of inventories‚ which can increase the chance of product stockouts. 2. Distinguish among cycle
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Management 1) Develop an inventory plan to help ZBC. We will use EOQ Formula in 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
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down to less than 1‚ at which time we switched to contract 3. We made no further changes after switching to contract 3. Part 1: Reasoning for Decisions Our decisions were somewhat limited to our EOQ model’s completion and our risk adversity. In the last simulation we relied much more heavily on our EOQ model and planned out purchases of machinery with the raise in demand. However‚ it was because we did not create a safety margin for production which came from our over estimating our carrying costs
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marks) Calculating the EOQ. EOQ = SQRT(2 * F * T / H) = (2 * 80 * 200‚000 / 1.00)0.5 EOQ = 5‚656.85 kg (4 marks) Calculating the EOQ savings. Total cost = (F * T/Q) + (H * Q / 2) = (80 * 200‚000 / 10‚000) + (1.00 * 10‚000/2) Total Cost @10‚000 kg = $6‚600 Total Cost EOQ = (F * T / Q) + (H * Q / 2) where Q = 5‚656.85 kg = (80 * 200‚000 / 5‚656.85) + (1.00 * 5‚656.85 / 2) = $5‚656.85 Savings with EOQ = $943.15 = $6‚600 - $5‚656.85 per planning period (10 marks) Try Q (actually‚ EOQ) = 5‚656.85 kg. Then
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