After a merger, Old Framkranz found himself the only inventory clerk left at Allied Breakwater Company...
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After a merger, Old Framkranz found himself the only inventory clerk left at Allied Breakwater Company (ABC). The merger had left ABC with only 10 parts in inventory, and he'd been told to manage them as effectively as possible. Each part was to be reviewed once a week. (ABC worked a very exhausting five-day week.) Framkranz knew inventory carrying cost was 20 percent per dollar of cost per year. He also knew, to really manage a part's inventory well, he would have to spend a full day on the review, but he could do a reasonably good job in half a day. Even the most cursory review would require one-quarter day per part, however. Files for the 10 parts contain the following information. How should Framkranz schedule the review of the parts? Part No. 1 234567890 10 Vendor ABB с ABCACA Unit Cost ($) 0.20 1.00 0.25 3.00 10.00 7.00 0.50 5.00 20.00 2.00 Shipping Cost per Cost/Unit Order ($) 0 0.10 0.10 0.25 0 0.10 0.25 0 0.30 0 10 20 15 15 10 15 20 10 20 10 Annual Usage 1,000 10 12 100 300 2 10 400 2 200 Reorder Point 50 1 2 20 15 1 2 20 1 10 Order Quantity 70 45 95 71 55 7 13 39 4 100 After a merger, Old Framkranz found himself the only inventory clerk left at Allied Breakwater Company (ABC). The merger had left ABC with only 10 parts in inventory, and he'd been told to manage them as effectively as possible. Each part was to be reviewed once a week. (ABC worked a very exhausting five-day week.) Framkranz knew inventory carrying cost was 20 percent per dollar of cost per year. He also knew, to really manage a part's inventory well, he would have to spend a full day on the review, but he could do a reasonably good job in half a day. Even the most cursory review would require one-quarter day per part, however. Files for the 10 parts contain the following information. How should Framkranz schedule the review of the parts? Part No. 1 234567890 10 Vendor ABB с ABCACA Unit Cost ($) 0.20 1.00 0.25 3.00 10.00 7.00 0.50 5.00 20.00 2.00 Shipping Cost per Cost/Unit Order ($) 0 0.10 0.10 0.25 0 0.10 0.25 0 0.30 0 10 20 15 15 10 15 20 10 20 10 Annual Usage 1,000 10 12 100 300 2 10 400 2 200 Reorder Point 50 1 2 20 15 1 2 20 1 10 Order Quantity 70 45 95 71 55 7 13 39 4 100
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