A.B.

C.

Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 52 gallons of Yellow Paint every week (for 52 weeks per year). They purchase Yellow Paint from their supplier at a price of $3.00 per gallon. [The company does not hold Safety Stock] It takes 1.75 weeks to receive an order from the supplier. Administrative costs for Ordering paint have been estimated to be $25 per order. Holding Costs - 30% of the purchase price per gallon per year. What is the most Economic Order Quantity? Reorder Point, ROP = dL + SS Service Level z Value 99.99% 3.719 d = Average Demand Rate per Time Period 99.90% 3.090 D = Demand Rate per Year 99.00% 2.326 L = Average Lead time (time periods) 95.00% 1.645 90.00% 1.282 SS = Safety Stock = zoal 85.00% 1.036 80.00% 0.842 Oal = Loa (Assuming Lead Time is constant as in Periodic review) 0g = Standard Deviation of the demand z = Number of Standard deviations corresponding to a service level Q = Order Quantity Average Inventory Level = Q/2 + SS H = Holding Cost Per Year Per Unit S = Ordering/Setup Cost Per Order Total Annual Inventory Cost = (%) + + s + H(SS) Time Between VH Economic Order Quantity, EOC Orders = TBO = 60 A. 54 gallons of paint B.671 gallons of paint C. 134 gallons of paint Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution Warehouse. The Paint Supply Store franchise sells an average of 70 gallons of Purple Paint every week (for 52 weeks per year). Their current policy is that when they place an order for Purple Paint from their supplier, they order 90 gallons at a price of $4.00 per gallon. [The company does not hold Safety Stock] It takes 2.50 weeks to receive an order from the supplier. Administrative costs for Ordering paint have been estimated to be $35 per order. Holding Costs = 40% of the purchase price per gallon per year. What is the Total Annual Inventory Cost for the company's current policy? Reorder Point, ROP = dL + SS Service Level z Value 99.99% 3.719 d = Average Demand Rate per Time Period 99.90% 3.090 D = Demand Rate per Year 99.00% 2.326 L = Average Lead time (time periods) 95.00% 1.645 90.00% 1.282 SS = Safety Stock = z Oal 85.00% 1.036 Odl = JL o 80.00% 0.842 (Assuming Lead Time is constant as in Periodic review) Od = Standard Deviation of the demand z = Number of Standard deviations corresponding to a service level Q = Order Quantity Average Inventory Level = Q/2 + SS H = Holding Cost Per Year Per Unit S = Ordering/Setup Cost Per Order Total Annual Inventory Cost = (%) + + s + H(SS) Economic Order Quantity, EOQ = 1209 Time Between Orders = TBO = 500 VH Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 64 gallons of Green Paint every week (for 52 weeks per year). They purchase Green Paint from their supplier at a price of $3.50 per gallon. [The company does not hold Safety Stock] It takes 2.25 weeks to receive an order from the supplier. Administrative costs for Ordering paint have been estimated to be $30 per order. Holding Costs = 35% of the purchase price per gallon per year. At what inventory level should the company place an order? Reorder Point, ROP = dL + SS Service Level z Value 99.99% 3.719 d = Average Demand Rate per Time Period 99.90% 3.090 D = Demand Rate per Year 99.00% 2.326 L = Average Lead time (time periods) 95.00% 1.645 90.00% 1.282 SS = Safety Stock = z Odl 85.00% 1.036 Odl Lok 80.00% 0.842 (Assuming Lead Time is constantas in Periodic review) og = Standard Deviation of the demand z = Number of Standard deviations corresponding to a service level Q = Order Quantity Average Inventory Level = Q/2 + SS H = Holding Cost Per Year Per Unit S = Ordering/Setup Cost Per Order Total Annual Inventory Cost = (*)h + @)s +H(SS) Total Annual Inventory Co Economic Order Quantity, EOQ Time Between Orders = TBO = 0 A. 144 gallons of paint B. 3744 gallons of paint