Inventory homework (Deterministic Models) (Please show all work) Areas under the standardized normal curve, from - to + z 0 Z .00.01 .02 .03 .04 .05 .06 .07 .08 .09 .0..... .1 2..... 3.... .5000 .5398 .5793 .6179 .6554 .5040 .5438 -5832 .5199 .5596 .5987 .6368 .6736 .5279 .5675 .6064 .6443 .6808 5319 .5714 .6103 .6480 .6844 5359 .5753 .6141 .6517 .6879 .6217 4....... -5080 .5478 .5871 .6255 .6628 .6985 .7324 .7642 .7939 .8212 .5120 5517 .5910 .6293 .6664 .7019 .7357 .7673 .7967 .8238 .6591 .6950 .7291 .7611 .7910 .8186 .8438 .8665 .8869 .9049 .9207 .5........ .6........ 7........ .7 .8....... 9 6915 .7257 .7580 .7881 .8159 -5160 .5557 .5948 .6331 .6700 .7054 .7389 .7703 .7995 .8264 .8508 .8729 8925 9099 9251 .7088 .7422 .7734 .8023 .8289 .5239 .5636 .6026 6406 .6772 .7123 .7454 .7764 .8051 .8315 .8554 .8770 .8962 .9131 .9279 .7224 .7549 .7852 .8133 .8389 .7157 .7486 .7794 .8078 8340 .8577 .8790 .8980 .9147 .9292 1.0 1.1 1.2 1.3 1.4 .8413 8643 8849 9032 9192 .8461 .8686 .8888 .9066 .9222 .8485 .8708 .8907 .9082 .9236 .8531 .8749 .8944 .9115 .9265 .7190 .7517 .7823 .8106 8365 8599 .8810 .8997 .9162 9306 9429 .9535 .9625 .9699 .9761 .8621 .8830 .9015 .9177 .9319 1.5 1.6 1.7 1.8 1.9 9332 9452 .9554 9641 .9713 .9345 .9463 .9564 .9649 .9719 .9357 .9474 .9573 .9656 .9726 9382 9495 .9591 9671 .9738 9394 .9505 -9599 .9678 .9744 .9406 9515 .9608 .9686 .9750 9418 .9525 .9616 .9693 .9756 9441 9545 9633 .9706 .9767 9370 .9484 .9582 9664 .9732 9788 9834 .9871 .9901 .9925 2.0 2.1 2.2 23 24 .9772 9821 9861 9893 9918 .9778 .9826 9864 9896 9920 9783 9830 .9868 9898 .9922 .9798 9842 9878 9906 9929 9803 9846 .9881 .9909 9931 .9808 .9850 .9884 .9911 .9932 .9817 .9857 9890 .9916 .9936 .9793 9838 9875 .9904 .9927 9945 .9959 .9969 9977 .9984 9812 9854 .9887 9913 9934 .9951 .9963 .9973 .9980 9986 2.5 2.6 2.7 2.8 2.9 9938 9953 .9965 9974 .9981 .9940 .9955 .9966 9975 .9982 .9941 .9956 .9967 .9976 .9982 .9943 .9957 .9968 9977 .9983 9946 9960 9970 9978 .9984 9948 .9961 .9971 9979 .9985 .9949 .9962 .9972 .9979 9985 .9989 .9992 .9995 .9996 .9997 .9952 9964 .9974 9981 .9986 .9990 .9993 9995 .9997 9998 3.0 9987 3.1 .9990 3.2... .9993 3.3..... 9995 3.4........ 9997 .9987 .9991 .9993 .9995 9997 .9987 .9991 .9994 9995 9997 .9988 .9991 .9994 9996 .9997 9988 9991 9994 9996 9997 .9989 9992 9994 .9996 .9997 9989 .9992 .9994 .9996 .9997 9990 9993 9995 9996 .9997 (PLEASE SHOW ALL WORK) QUESTION 1 Sony Electronics hires Mr. Mark Gunther of Brockhart & Kaitlin in order to manage inventory operations. Sony has a supplier that produces electronic circuit boards for its TV sets. Sony currently pays $300 for each circuit boards, and consumes an estimated 30,000 boards in a year. It costs Sony $700 to place an order to its supplier. The unit inventory holding cost is estimated to be equal to 50% of the purchasing price. Determine the economic order quantity for Sony's outsourcing alternative. (Please show all work) 1. PART 2 Given the economic order quantity that you found for Question 1, calculate the associated annual total cost (including ordering, inventory holding and purchasing costs) for Sony's outsourcing alternative. (Please show all work) 1. PART 3 Sony's engineers inform Mark Gunther that a new facility soon to be fully operational within the supply chain of the company can actually produce the same circuit boards (of Problem 1). The unit manufacturing cost at this plant is estimated to be equal to $295 per board. The setup cost is equal to $700. The plant is scheduled to work for 250 days and has a daily demand of 120 boards (corresponding to an annual demand of 30,000) while having the capability of producing at a rate of 240 boards/day. As in the outsourcing alternative of Problem 1, the unit inventory holding cost is 50% of the unit manufacturing cost. Compute the economic production quantity. (Please show all work) 1. PART 4 Given the economic production quantity that you calculated for Question 3, find the associated annual total cost (including setup, inventory holding and manufacturing costs) for Sony's manufacturing alternative. (Please show all work) 1. PART 5 Given your answers for question 2 and questi 4, determine whether Sony should choose outsourcing or manufacturing alternative. (Please show all work) 1. A) Sony should choose manufacturing alternative. B) Sony should choose outsourcing alternative. PART 6 The supplier Sony Electronics uses (in Problem 1 and 2) produces a new and updated price list based on increased order quantities. The following list shows the new prices: Order Quantity Unit Price per Circuit Card 1 - 499 $300.00 500 - 999 $297.00 1000 - 1499 $294.00 1500 - 1999 $291.00 2000+ $290.00 Using the same ordering cost information available in Problem 1, what is the optimal order quantity for Sony? (Please show all work) A) 999 B) 1500 C) 2000+ D) 500 E) 1000 PART 7 Using the same ordering cost information available in Problem 1, and the optimal order quantity for Sony in Problem 6, calculate the associated annual total cost for the outsourcing alternative with price discounts. (Please show all work)