Name $$ uID

Problem Set $10$

Note: You will find the Example videos in the module very helpful in answering these questions. Please type in the space provided.

Question $1.$ A large Tampa investment firm uses an average of $40$ boxes of copier paper a day to send trades and statements to clients. The firm operates $260$ days a year. Storage and handling costs for the paper are $$30$ a year per box, and it costs approximately $$60$ to order and receive a shipment of paper. Round to the nearest whole number $(50$ points, $10$ points each$).$

$\backslash$table$[[$a$.$ What order size would minimize the$],[$sum of annual ordering and carrying costs$],[($EOQ$)?],[$b$.$ Compute the total annual cost using$],[$your order size from part a$.],[\backslash$table$[[$c$.$ Except for rounding $($penny$],[$differences$),$ are annual ordering and$],[$carrying costs always equal at the EOQ?$]]],[\backslash$table$[[$d$.$ The office manager is currently using$],[$an order size of $200$ boxes. What is the$],[$difference in total annual cost between$],[200$ boxes and your answer to part $a,],[$rounded to the nearest whole number?$]]],[\backslash$table$[[$e$.$ The partners of the firm expect the$],[$office to be managed $\text{'}$in a cost$-$efficient$],[$manner$.\text{'}$ Would you recommend that the$],[$office manager use the optimal order size$],[$instead of $200$ boxes? Justify your$],[$answer$.]]]]$

Question $2.$ A company is about to begin production of a new product. The manager of the department that produces one of the components for the product wants to know how often the machine needed to produce the item will be available for other work.

The machine produces the item at a rate of $200$ units a day. Eighty units are used daily in assembling the final product. Assembly takes place five days a week, $50$ weeks a year. The manager estimates that it will take almost a full day to get the machine ready for each production run, at a cost of $$300.$ Inventory holding costs will be $$10$ per unit. Round to two decimal points $(50$ points, $10$ points each$)$

$\backslash$table$[[\backslash$table$[[$a$.$ What run quantity $($optimal run size$)$ will$],[$minimize total annual costs $($EPQ$)?]],],[\backslash$table$[[$b$.$ What is the length of a production run$],[($run time$)$ in days?$]],],[\backslash$table$[[$c$.$ During production, how many units a$],[$day go to inventory as opposed to into$],[$production$?]],],[\backslash$table$[[$d$.$ What is the cycle time for optimal run$],[$time$?]],],[\backslash$table$[[$e$.$ How many days will be available$],[$between the production runs of this new$],[$item$,$ allowing for the production of other$],[$products during the downtime?$]],]]$