ASSIGNMENT 5 (UNIT EXERCISE 10)

Q1) What are the differences between EOQ and POQ models?

Q2) Draw and explain the graph of EOQ and POQ models.

Q3) What is the use of safety stock?

Q4) Explain the quantity discount model.

Q5) A company makes bicycles. It produces 500 cars a month. It buys the tires for car from a supplier at a cost of $20 per tire. The company's inventory carrying cost is estimated to be 15% of the cost and the order is $50 per order.

1. Calculate the EOQ
2. What is the number of orders per year?
3. Compute the average annual ordering cost.
4. Compute the average inventory.
5. What does the average annual carrying cost?
6. Compute the total cost.

Q6) Give examples of holding costs and carrying costs.

Q7) We need 1,000 electric drills per year. The ordering cost for these is $100 per order and the carrying cost is assumed to be 40% of the per-unit cost. In orders of less than 120, drills cost $78; for orders of 120 or more, the cost drops to $50 per unit.

Should we take advantage of the quantity discount?

Q8)Presume that Jack carries a modern white kitchen ceiling lamp that is quite popular. The anticipated demand during lead time can be approximated by a normal curve having a mean of 190 units and a standard deviation of 30 units. What safety stock should Jack carry to achieve a 95% service level?

Q9) Assume you have a product with the following parameters:

Holding cost per per unit.

Order per order

What is the EOQ?

Q10) What is the difference between logistics and supply chain.

Q11) Explain the role of the supply chain manager.