Question: Anand Corporation uses a fixed order quantity system and operates 52 weeks a year. It purchases battery packs for $11.70 each and uses 90 packs/week.

Anand Corporation uses a fixed order quantity system and operates 52 weeks a year. It purchases battery packs for $11.70 each and uses 90 packs/week. The setup (ordering) cost is $54 per order and the holding cost is 27 percent of the cost. They would like to achieve a cycle service level of 80 percent. Their lead time is 3 weeks with a standard deviation of weekly demand of 15 packs.

If the average demand is actually 60 packs instead of 90 packs and the standard deviation of weekly demand is 10 units, what would the total cost be? (NOTE: you will have to calculate a revised EOQ and SS for this problem and use your EOQ as your lot size)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Choose between alternatives E and F, based on NPW. The minimum attractive rate of return is 15%. The following table summarizes the economic characteristics of the alternatives: Alternative Total...

An ophthalmologist's office operates 52 weeks per year. It purchases disposable contact lenses for $11.70 per pair. The following information is available about these lenses. Demand 90 pairs/week...

Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.25 per bag. The following information is available about...

Sam's Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about...

Question 1 : Sam s Cat Hotel operates 5 2 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $ 1 1 . 7 0 per bag. The following information...

. Sam s Cat Hotel operates 5 2 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $ 1 1 . 7 0 per bag. The following information is...

Nationwide Auto Parts uses a periodic review inventory control system for one of its stock items. The review interval is 6 weeks, and the lead time for receiving the materials ordered from its...

At Dot Com, a large retailer of popular books, demand is constant at 32,000 books per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per book....

Sams Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous reviewinventory system. It purchases kitty litter for $11.70 per bag. The following information isavailable about...

Sam's Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about...

Sams Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about...

[6+8pts.] Write down the general solutions of the following equations. dy (a) dr dy = 0 4- + 4 dr? dr (b) (D? 3D 4)(D +2D +1+ Dy = 0

What is "unique" about VNB and how could the uniqueness give the bank a competitive advantage?

Operating data for Martinez Corporation are presented below. Prepare a schedule showing a vertical analysis for 2 0 2 2 and 2 0 2 1 . ( Round percentages to 1 decimal place, e . g . 1 2 . 1 \ % . )...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....