Problem

$2$

: Inventory Planning Problem

$2$

: Inventory Planning at York Products Corporation

$($

$3$

$0$

$$marks

$)$

$$The York Products Corporation

$($

YPC

$)$

$$is developing ordering policies for its materials that it stocks for resale to its customers. The materials have been classified into three classes: Answer the following questions: a

$.$

$)$

$$Assume the LM

$5$

$0$

$0$

$$costs $

$2$

$4$

$.$

$9$

$5$

$,$

$$and YPC considers that

$1$

$0$

$,$

$0$

$0$

$0$

$$of the parts will be needed annually. YPC also estimates a

$4$

$0$

$$percent carrying cost for its inventory per year, it costs approximately $

$1$

$0$

$0$

$$to process, receive, and inspect an order for these parts. YPC uses a fixed order quantity inventory system for Class A materials. How many of the parts should be ordered when the material is replenished? b

$.$

$)$

$$The supplier of the LM

$5$

$0$

$0$

$$has offered to ship the part at a race of

$1$

$0$

$0$

$$per day during shipping periods via the supplier's own truck and YPC

$\text{'}$

s plant works

$3$

$0$

$0$

$$days per year. If all other data in part a

$)$

$$above remain the same: b

$-$

$1$

$)$

$$How many parts should be ordered when the LM

$5$

$0$

$0$

$$is replenished? b

$-$

$2$

$)$

$$What annual savings will come to YPC if the new shipping policy is enacted? c

$.$

$)$

$$The supplier of the LM

$5$

$0$

$0$

$$has agreed to give YPC a quantity discount, which means more order quantity the company places, more discounts will be applied on the cost per part. The following is the cost schedule that offer to YPC: If all other data in part a

$)$

$$above remain the same: c

$-$

$1$

$)$

$$How many parts should be ordered when the LM

$5$

$0$

$0$

$$is replenished? c

$-$

$2$

$)$

$$What annual savings will come to YPC because of the quantity discounts? d

$.$

$)$

$$The supplier of the LM

$5$

$0$

$0$

$$has offered to combine its offer of gradual supply during shipping periods in part b

$)$

$$above and the quantity discount offer in part c

$)$

$.$

$$How many parts should be ordered when the material is replenished if all other data remain the same as in parts b

$)$

$$and c

$)$

$?$

$$e

$.$

$)$

$$Assume the EM

$8$

$0$

$$costs $

$3$

$.$

$4$

$0$

$$per pound. YPC considers that

$8$

$,$

$0$

$0$

$0$

$$pounds will be needed annually, and YPC

$\text{'}$

s plant works

$3$

$0$

$0$

$$days per year. It costs approximately $

$2$

$5$

$$to process, receive, and inspect an order for the material. YPC uses a fixed order period inventory system for Class C materials. Assume the carrying cost rate for one EM

$8$

$0$

$$per year is also

$4$

$0$

$$percent$.$ How often should the material be ordered?at York Products Corporation

$($

$3$

$0$

$$marks

$)$

$$The York Products Corporation

$($

YPC

$)$

$$is developing ordering policies for its materials that it stocks for resale to its customers. The materials have been classified into three classes:

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