Question

1 - the annual demand for product 15600 units the weekly demand is 280 units with a standard deviation 90 units the cost to place an order is $31.00 and the time from order to receipt is 4 weeks the annual inventory carrying cost is $0.10 per unit

A- what is the EOQ quantity?

B- from the information above what is the reorder point maintain a 95% service level?

2 - the weekly demand is 200 units the cost to place an order in $2.00 and the time from ordering to receipt is four weeks the weekly inventory carrying cost is 1$ per unit and the weekly backorder cost is $0.5 per unit what is the optional planned backorder level?

3 - the weekly demand is 200 units the cost to place an order in $2.00 and the time from ordering to receipt is four weeks the weekly inventory carrying cost is $0.01 per unit suppose that the weekly production rate is 500 units what is the optimal EPQ quantity?

Answer 1

Given: Annual Demand = 15600 units

Ordering cost = $31.00

Annual inventory carrying cost = $0.10 per unit

A. We get Economic order quantity EOQ as follows:

As seen from above, EOQ = 3109.98 = 3110 units

B. Weekly demand = 280 units

Standard deviation = 90 units

Lead time = 4 weeks

For 95% service level, we get value of z from normal distribution table as

z = 1.65

We know,

Reorder point =( x Lead time + z x x =(280 x 4 + 1.65 x 90 x = 1417 units

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Since question 2 and 3 are not subparts and are independent, they have to be posted separately.