MGMT 4317 Chapter 9 Homework Problems - You must show all work in all problems to receive credit. You will receive zero (0) credit for providing the answer only. 1. A company is using a carrier to deliver goods to an important customer. The annual demand is $5,000,000 and the average transit time is 12 days. Another carrier promises delivery in 8 days. What is the reduction in transit inventory? 2. A florist carries an average inventory of $10,000 in cut (fresh) flowers. The flowers require special storage and are highly perishable. The florist estimates capital costs at 5%, storage costs at 20%, and risk costs at 30%. What is the annual carrying cost? 3. An importer operates a warehouse that has the following annual costs. Wages for purchasing are $30,000, purchasing expenses are $20.000, customs and brokerage costs are $20 per order, the cost of financing the inventory is 7%, storage costs are 5%, and the risk costs are 9%. The average inventory is $300,000, and 5,000 orders are placed in a year. What are the annual ordering and carrying costs? 4. Given the following data, calculate a level production plan, quarterly ending inventory, and average quarterly inventory. If inventory carrying costs are $4 per unit per quarter, what is the annual carrying cost? Opening and ending inventories are zero (O). Quarter 1 Quarter 2 Quarter 3 Quarter 4 Totals Forecast Demand 5000 6000 9500 7500 Production Ending Inventory Average Inventory Inventory Cost 5. If the annual cost of goods sold is $30,000,000 and the average inventory is S6,000,000: a. What is the inventory turns ratio? b. What would be the reduction in average inventory if, through better materials management, if the inventory turns ratio was increased to 10 times per year? c. If the cost of carrying inventory is 15% of average inventory, what is the annual savings? 6. A company has 800 units on hand and the annual usage is 20,000 units. There are 250 working days per year. What is the days of supply