OM$-$HW ASSIGNMENT: ECONOMIC ORDER QUANTITY $($EOQ$)(25$ pts$.)3$ pts each except for Q$1$&Q$3$

Note: You are expected to complete this HW assignment directly through the CANVAS to get a full credit.

$\_\_01.$ If annual usage for an inventory item is $50,000$ units, lead time is three days, and safety stock is $100$

units, the reorder points $($ROP$)$ are $($note: this company is working $250$ days during the year$)2$ pts$.$

$\_\_02.$ LEE is selling $4$ computers every day. The ordering cost is $$100$ per order, and the computer costs

LEE $$1,000($i$.$e$.,$ the price is $$1,000).$ Orders arrive three days from the time they are placed.

Holding cost is equal to two percent $(2\%)$ of the cost of the computer. If LEE opens his store

$250$ days a year, what would be the average inventory level?

$03.$ Which of the following is NOT an assumption of the economic order quantity model shown below? $2$ pts$.$

Q$*=$ where S $=$ Ordering $($or Setup$)$ Cost and H $=$ Holding $($or Carrying$)$ Cost

a$.$ Demand is known, constant, and independent. b$.$ Lead time is known and consistent.

c$.$ Quantity discounts are not possible.

d$.$ Demand is unknown and dependent on the market condition.

$(04-05)$ LEE just opened the gift store in Glassboro. He purchases cards from Hall Marks for $$10$ each box. Lee$$s

gift store expects to sell $10$ boxes of cards a week. Lee$$s store estimates it costs them $$5\mathrm{.}00$ to place an

order, and the holding cost is about $20\%$ purchase cost per box. It usually takes $5$ days to get each order

because of its high demand.

$04.$ What is inventory's economic order quantity $($i$.$e$.,$ EOQ$)($Find the nearest value$)?$

$05.$ What is the annual total inventory cost per year $($i$.$e$.$ total ordering cost $+$ total carrying cost $)?$

$(06-08)$ The LEE's computer manufacturing company plans on the steady demand for a special part in its main CPU

of $20$ units per day. If the part is purchased, it costs the company $$30$ per unit. The cost of placing an order

is $$20$ per order. The company's carrying cost is estimated to be $20$ percent of the value of inventory $($i$.$e$.,20$

$\%$ of purchasing price$).$ Assume that LEE's company operates a $200-$day working year and no shortages are

allowed due to the cost of disrupting the manufacturing process. $($Choose the nearest value$)$

$06.$ What is the average inventory? $(2$ pts$)$

$07.$ What is the total inventory carrying costs $($i$.$e$.,$ total carrying cost per year$)?$

$08.$ What is the number of orders during the year $($i$.$e$.,$ How often is LEE supposed to place an order

during the year$)?$

$\_\_$Q$9.$ For a certain item, the cost$-$minimizing order quantity obtained with the basic EOQ model is $200$ units, and

the total annual inventory $($ordering and carrying$)$ cost is $$600.$ What is the inventory carrying cost per unit

$($i$.$e$.,$ Cc$)$ per year for this item?