Homework: M3 Assignment 3

Problem 13

Problem 14

**can you type the formula for part B** Thank You

Save Homework: M3 Assignment 3 Score: 2 of 10 pts 2 of 9 (2 complete) HW Score: 2.5%, 2 of 80 pts x Problem 13 Question Help Sam's Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.75 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. > Demand = 85 bags/week > Order cost = $56/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 90 percent > Lead time = 4 week(s) (28 working days) > Standard deviation of weekly demand = 18 bags > Current on-hand inventory is 315 bags, with no open orders or backorders. a. What is the EOQ? Sam's optimal order quantity is bags. (Enter your response rounded to the nearest whole number.) The average time between orders is 5 weeks. (Enter your response rounded to one decimal place.) b. What should R be? The reorder point is 206 bags. (Enter your response rounded to the nearest whole number.) c. An inventory withdrawal of 10 bags was just made. Is it time to reorder? It is not time to reorder. d. The store currently uses a lot size of 490 bags (i.e., Q = 490). What is the annual holding cost of this policy? The annual holding cost is $ 700.70 (Enter your response rounded to two decimal places.) What is the annual ordering cost? The annual ordering cost is $ 523.18'(Enter your response rounded to two decimal places.) Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large? O A. When Q = 490, the annual holding cost is less then the ordering cost, therefore Q is too small. B. Both quantities are appropriate. C. There is not enough information to determine this. D. When Q = 490, the annual holding cost is larger than the ordering cost, therefore Q is too large. e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ? The annual holding cost with the EOQ is $ 604.89 (Enter your response rounded to two decimal places.) The annual ordering cost with the EOQ is $ 606.05). (Enter your response rounded to two decimal places.) Therefore, Sam's Cat Hotel saves $ 12.94 by shifting from the 490-bag lot size to the EOQ. (Enter your response rounded to two decimal places.) Homework: M3 Assignment 3 Save Score: 0 of 6 pts 3 of 9 (3 complete) HW Score: 0%, 0 of 80 pts X Problem 14 Question Help Sam's Cat Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $12.00 per bag. The following information is available about these bags: > Demand = 70 bags/week > Order cost = $55.00/order > Annual holding cost = 40 percent of cost > Desired cycle-service level = 80 percent > Lead time = 5 weeks (30 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) b. Suppose that actual demand is 65 bags but that ordering costs are cut to only $10.00 by using the internet to automate order placing. However, the buyer does not tell anyone, and the EOQ is not adjusted to reflect this reduction in S. How much higher will total costs be, compared to what they could be if the EOQ were adjusted? The costs will be $ 154.33 higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)