A juice company purchases components from a variety of sources through their global network of suppliers....
A juice company purchases components from a variety of sources through their global network of suppliers. They are looking to determine their order quantity for PET bottles. They have forecast their demand for PET bottles for the next year to be 1206115 cases. Being a standard component, sales are expected to be constant/uniform over the course of the year. They operate 5 days per week so each year is made up of 260 days. The lead time for PET bottles (time from order to receipt is 2 days. They have also determined that the cost to carry a case of PET bottles in inventory is $1.38 per case per year and that order costs are estimated at $78.96 per order. (Note: when working with inventory problems demand and carrying costs must be stated in the same time frame, annual in this case) The PET bottles purchased for $1.24 per case. Given that the assumptions for the basic EOQ model apply, calculate the optimal order quantity (in cases) for this item. How many days will each order last?
Homework Answers
Given:Annual demand=1206115
Number of working days =260;
Lead time =2 days
holding cost per unit per year=$ 1.38
cost per order=$ 78.96
Optimal order quantity also known as Economic order quantity is given by the formula ,
EOQ=sqrt(2*Annual demand*cost per order/holding cost per unit per year)
=sqrt(2*1206115*78.96/1.38)
=11748.256
=11748 cases per order (rounding up)
Number of orders =Annual demand/EOQ=1206115/11748=102.6656 =103 orders per year
Time between orders =Number of working days /Number of orders
=260/103
=2.524
=2.5 days
Number of days each order will last=time between orders =2.5 days
Add Answer to:
A juice company purchases components from a variety of sources
through their global network of suppliers....
A juice company purchases components from a variety of sources through their global network of suppliers. They are looki...
A juice company purchases components from a variety of sources through their global network of suppliers. They are looking to determine their order quantity for PET bottles. They have forecast their demand for PET bottles for the next year to be 1195295 cases. Being a standard component, sales are expected to be constant/uniform over the course of the year. They operate 5 days per week so each year is made up of 260 days. The lead time for PET bottles...
(2) Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use...
(2) Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are realistic. The annual demand is 7500 units, the ordering cost is $40 per order, and the annual holding cost rate is 35%. a. Assume 350 days of operation per year. Cress Electronics wants a 97.5% service level. If the lead...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company's inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Quantity purchased Price per unit 1 to...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per...
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company’s inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Discount category 1 2 3 Quantity purchased...
LC Ltd is a distributor of semiconductor products. It purchases integrated circuit (IC) products from manufacturers...
LC Ltd is a distributor of semiconductor products. It purchases integrated circuit (IC) products from manufacturers at a wholesale cost of $200 and resells it to end customers. LC Ltd forecasts that demand of semiconductor products in 2019 is 600,000 units. Ordering costs are S600 per order and carrying costs are $40 per unit, including the opportunity cost of holding inventory Takashi Ltd is a manufacturer of handheld computers. It purchases materials from suppliers. The materials are stored in the...
accounts multiple choice The graph below depicts the components of total stock administration costs for an...
accounts multiple choice
The graph below depicts the components of total stock administration costs for an item of inventory Cost(s) Z Quantity (units) Nhat does the point labelled Z represent? Select one: a. Ordering costs b. Storage costs C. The economic order quantity d. Total stock administration costs Total Stock Administration costs under the EOQ model is the sum of: Select one: a. Carrying costs and reorder level costs b. Storage and carrying costs c. Minimum stock costs and reorder...
b) As a contractor to Petronas, East Technology uses 4000 valves for repairing one of Petronas plant every year. These valves are purchased from a supplier 200 km away. The following information...
b) As a contractor to Petronas, East Technology uses 4000 valves for repairing one of Petronas plant every year. These valves are purchased from a supplier 200 km away. The following information is known about the valves Table Q3b: Forecast demand for plastic product Annual demand 4000 Holding cost /valve/vear Order cost/ year RM 9 RM 25 s days Lead time Working days per year 250 Given the above information, calculate i) The economic order quantity (EOQ)? ii) The annual...
The Las Vegas Corporation purchases a critical component from one of its key suppliers. The operations...
The Las Vegas Corporation purchases a critical component from
one of its key suppliers. The operations manager wants to determine
the economic order quantity, along with when to reorder, to ensure
the annual inventory cost is minimized. The information obtained
from historical data has been collected in the Microsoft Excel
Online file below. Open the spreadsheet and perform the required
analysis to answer the questions below. Do not round intermediate
calculations. Round your answers according to the input
instructions for...
Teck is a Canadian metal mining and processing company with new investments in coal and oil....
Teck is a Canadian metal mining and processing company with new investments in coal and oil. The company has several warehouses in Western Canada that store thousands of parts and supplies for the machines and equipment used in its mines and operations. The stocks in the warehouses are controlled using computers in the Vancouver head office. For spare parts, the EOQ/ROP model is used. The following data is the usage of specific spare part during a nine-month period: Jan Feb...
Sam's Cat Hotel operates 51 weeks per year, 6 days per week, and uses a continuous...
Sam's Cat Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $12.50 per bag. The following information is available about these bags: Demand 80 bags/week Order cost $58.00/order Annual holding cost 40 percent of cost Desired cycle-service level 80 percent Lead time 4 weeks (24 working days) Standard deviation of weekly demand 15 bags Current on-hand inventory is 320 bags, with no open orders or backorders. a....
A company producing personal computers supplies various components from its suppliers and operates 52 weeks per year. A particular component is needed at the rate of 100 items per week. The company's inventory holding rate for this component is 20%. The administrative rate to place an order of any size to the manufacturer costs $50. The manufacturer, however, tries to have orders of larger size and comes up with the following discount policy Quantity purchased Price per unit 1 to...
LC Ltd is a distributor of semiconductor products. It purchases integrated circuit (IC) products from manufacturers at a wholesale cost of $200 and resells it to end customers. LC Ltd forecasts that demand of semiconductor products in 2019 is 600,000 units. Ordering costs are S600 per order and carrying costs are $40 per unit, including the opportunity cost of holding inventory Takashi Ltd is a manufacturer of handheld computers. It purchases materials from suppliers. The materials are stored in the...
accounts multiple choice
The graph below depicts the components of total stock administration costs for an item of inventory Cost(s) Z Quantity (units) Nhat does the point labelled Z represent? Select one: a. Ordering costs b. Storage costs C. The economic order quantity d. Total stock administration costs Total Stock Administration costs under the EOQ model is the sum of: Select one: a. Carrying costs and reorder level costs b. Storage and carrying costs c. Minimum stock costs and reorder...
b) As a contractor to Petronas, East Technology uses 4000 valves for repairing one of Petronas plant every year. These valves are purchased from a supplier 200 km away. The following information is known about the valves Table Q3b: Forecast demand for plastic product Annual demand 4000 Holding cost /valve/vear Order cost/ year RM 9 RM 25 s days Lead time Working days per year 250 Given the above information, calculate i) The economic order quantity (EOQ)? ii) The annual...
The Las Vegas Corporation purchases a critical component from
one of its key suppliers. The operations manager wants to determine
the economic order quantity, along with when to reorder, to ensure
the annual inventory cost is minimized. The information obtained
from historical data has been collected in the Microsoft Excel
Online file below. Open the spreadsheet and perform the required
analysis to answer the questions below. Do not round intermediate
calculations. Round your answers according to the input
instructions for...
Sam's Cat Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $12.50 per bag. The following information is available about these bags: Demand 80 bags/week Order cost $58.00/order Annual holding cost 40 percent of cost Desired cycle-service level 80 percent Lead time 4 weeks (24 working days) Standard deviation of weekly demand 15 bags Current on-hand inventory is 320 bags, with no open orders or backorders. a....
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago