number 9 a,b,c and d.

e cost L W e that it is a function only of = 3,75 ). Make this subs tion (10.5) with the appro that it is a function only of and apply equa P e tot and subsequently A large distributor of ol EOQ policies based on an annual d er the past two Pent operated over the past two years with particular product has been onderh m al holding cost rate of 20. Under the EON policy a shows that because of an increase in the interest rate associated with bank loans.the lten of hold holding cost rate should be 27. a. What is the new economic order quantity for the product? b. Develop a general expression showing how the economic order quantity when the annual holding cost rate is changed from / to! S Nation-Wide Bus Lines is proud of its six-week bus driver-training program that it for all new Nation-Wide drivers. As long as the class site remains less than or equal to six-week training program costs Nation-Wide 522.000 for instructors, equipment, The Nation-Wide training program must provide the company with approximately drivers per month. After completing the training program new drivers are paid to per month but do not work until a full-time driver position is open. Nation-Wide views the per month paid to each idle new driver as a holding cost necessary to maintain a supply newly trained drivers available for immediate service Viewing new drivers as inventory type units, how large should the training classes be to minimize Nation-Wide's total annual train ing and new driver idle-time costs? How many training classes should the company hold year? What is the total annual cost associated with your recommendation? 9. Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation from a variety of differ ent suppliers. One particular supplier provides a part where the assumptions of the E model are realistic. The annual demand is 5000 units, the ordering cost is $80 per order. and the annual holding cost rate is 25% a. If the cost of the part is $20 per unit, what is the economic order quantity? b. Assume 250 days of operation per vear. If the lead time for an order is 12 days, what is the reorder point? c. If the lead time for the part is seven weeks (35 days), what is the reorder point? Com- pare this with the economic order quantity from part (a). Explain the relative size of these two quantities. Hint: Remember that the reorder point is expressed in terms of inventory position. d. What is the reorder point for part (c) if the reorder point is expressed in terms of the inventory on hand rather than the inventory position? 10. All-Star Bat Manufacturing, Inc., supplies baseball bats to major and minor league base- ball teams. After an initial order in January, demand over the six-month baseball season is approximately constant at 1000 bats per month. Assuming that the bat production process can handle up to 4000 bats per month, the bat production setup costs are $150 per setup. the production cost is $10 per bat, and the holding costs have a monthly rate of 2%, what production lot size would you recommend to meet the demand during the baseball season? If All-Star operates 20 days per month, how often will the production process operate, and what is the length of a production run? Assume that a production line operates such that the production lot size model of Section 10.2 is applicable. Given D = 6400 units per year, C = $100, and Ch = $2 per unit per year. compute the minimum cost production lot size for each of the following production rates: a. 8000 units per year b. 10,000 units per year c. 32,000 units per year d. 100,000 units per year