Question: Given the following information, formulate an inventory management system. The item is demanded 50 weeks of the year. Item cost $10.00 Order cost $227 Annual

Given the following information, formulate an inventory management system. The item is demanded 50 weeks of the year.

Item cost $10.00

Order cost $227

Annual holding cost 32% of the item cost

Annual demand 24, 300

Average demand 486 per week

Standard deviation of weekly demand 34.64 per week

Lead time 3 weeks

Service probability 80%

a. state the order quantity and the reorder point.

b. Determine the annual holding and order cost

c. If a price break of $50 per order was offered for purchase qty over 2000, would you take advantage of it? How much would you save annually?

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!

Q:

Assume that Nolanvilles scal year ends on December 31. 1. Nolanvilles payroll for one of its departments is $15,000 per week. It pays its employees on the Thursday of the week following that in which...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. PARAMETER Item cost Order cost Annual holding cost Annual demand Average weekly demand...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. PARAMETER Item cost Order cost Annual holding cost Annual demand Average weekly demand...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost $10.00 Standard deviation of Order cost $250.00 weekly demand 25 per week...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost Order cost Annual holding cost (%) Annual demand Average demand $10.00...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to...

Q:

Given the following information, formulate an inventory management system. The item is demanded 5 0 weeks a year.PARAMETERVALUEItem cost$ 9 . 0 0 Order cost$ 1 9 7 . 0 0 per orderAnnual holding cost...

Q:

Given the following information, formulate an inventory management system. The item is demanded 5 0 weeks a year.PARAMETERVALUEItem cost$ 9 . 0 0 Order cost$ 1 9 7 . 0 0 per orderAnnual holding cost...

Q:

Problem 11-15 (Algo) 21 B Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year TARARETE VALU TANAHTER VALITE Item coat 08.00 Standard...

Q:

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. PARAMETER Item cost Order cost Annual holding cost Annual demand Average weekly demand...

Q:

Problem 11-15 Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost $ 7.00 Standard deviation of weekly demand 20 per week Order...

Q:

What difference does the distinction between obesity as a personal problem versus a social problem make in understanding the causes and consequences of this problem?

Q:

Define a transaction and give an example of each of the two types of events that are considered transactions.

Q:

What is the goal of financial management?

Q:

atch the compensation objectives with their meanings. Efficiency Efficiency drop zone empty. Fairness Fairness drop zone empty. Compliance Compliance drop zone empty. Improving performance and...