solve problem2

PROBLEM 11 A Hardware Shop sells 2,500 brackets in a year and the sales is relatively constant throughout the year. These brackets are purchased from a supplier from Ipoh for RM15.00 each, and the lead time is two days. The holding cost per bracket per year is RM1.50 (or 10% of the unit cost) and the ordering cost per order is RM18.75. There are 250 working days per year. 1. What is the EOQ? (2) 2. Given the EOQ. what is the average inventory? What is the annual inventory cost? (5) 3. In minimising the cost, how many orders would be made each year? What would be the annual ordering cost. (5) 4. Given the EOQ. what is the total annual inventory cost (including purchase cost)? (2) 5. What is the time between orders? (2) 6. What is the ROP? (2) PROBLEM The Hardware Shop (refer the question A), wants to reconsider its decision of buying the brackets and is considering in-house, production. The setup cost would be RM25.00 and 50 brackets could be produced in a day once the machine has been setup. The cost of producing one bracket is estimated as RM14.80. The holding cost would be 10% of this cost. 1. What is the daily demand rate? (2) 2. What is the PQM? (2) 3. How long will it take to produce the optimal production quantity? How much inventory is being sold during this time? (4) 4. Given the PQM, what is the maximum inventory level? What is the average inventory? What is the annual inventory cost? (6) 5. In minimising the cost, how many production runs would there be each year? What would be the annual setup cost? (4) 6. Given the PQM, what is the total annual inventory cost (including production cost)? (2) 7. If the lead time is one and a half-day, what is the ROP? (2)