Question: i need help with questions below: 1. A computer manufacturer, AMAZING COMP Inc., uses approximately 300,000 circuit boards annually. The boards are used at a
i need help with questions below:
1. A computer manufacturer, AMAZING COMP Inc., uses approximately 300,000 circuit boards annually. The boards are used at a steady rate during the 260 workdays that the plant operates. The price of each board is $2.50 and the annual carrying costs are 25 percent of the purchase price. The ordering cost is $110. Assume no safety stock (SS) is maintained. Determine:
a.) The optimal order quantity (economic order quantity - (EOQ)) each time the inventory needs to be replenished.
b.) To assure accurate administrative records, a purchase order is given to the supplier each time the EOQ is ordered. The number of orders issued per year for circuit boards.
c.) The number of workdays between each purchase order placed (length of order cycle).
d.) The average inventory level (quantity) of circuit boards.
e.) The annual carrying (holding) cost.
f.) The total annual inventory costs (TC, total annual carrying and ordering costs).
2. Using the same information given in problem #1, how much would the total annual costs (TC) increase (compared to 1.g. above) if the order quantity must be 15,000 units because of a standard shipping-container size?
3. Using the same information given in problem #1, in addition, due to poor supplier delivery the company has decided to maintain a safety stock of 2000 units. The lead time for ordering these circuit boards is two days. Determine:
a.) The increase in average inventory level because of the safety stock.
b.) The maximum inventory level of circuit boards.
c.) The annual ordering cost.
d.) The annual carrying (holding) cost.
e.) The reorder point in units?
f.) The increase in total annual inventory costs (TC) because of the safety stock.
6. The Wood Valley Dairy makes cheese to supply to stores in its area. The dairy can make 250 pounds of cheese per day, and the demand at the area stores is 180 pounds per day - 365 workdays. Each time the dairy makes cheese, it costs $125 to setup the production process. The annual cost of carrying a pound of cheese in a refrigerated storage area is $12. Assume no safety stock is maintained. Determine:
a.) The economic production quantity (EPQ).
b.) The optimum number of production runs per year.
c.) The length of time required for each production run (run time - in working days).
d.) The time in days between production run starts (length of order cycle).
e.) What is the total annual ordering (setup) cost?
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