1 George Walker has compiled the following table of six items in inventory along with the unit cost and the annual demand In units Identification Code XXI B66 3CPO 33CP R2D2 RMS Total Unit Cost ($) Annual Demand in Units 1,200 1,110 896 1,104 1,110 961 Total %

5.84 5.40 1.12 74.54 2.00 2.08

12.2 Borekeri Enterprise has the following 10 items in inventory. Theodore Boreki asks you, a recent OM graduate, to divide these items into ABC classification. What do you report back? Identification Code A2 B8 C7 D1 E9 F3 G2 H2 I5 J8 Total Annual Demand in Units 3,000 4,000 1,500 6,000 1,000 500 300 600 1,750 2,500

Unit Cost ($) $50 12 45 10 20 500 1,500 20 10 5



in Richmond.5 William Beville’s computer training school.12.4 Howard Electronics. has approximately 7.000 items in its inventory and has hired Joan Paul to manage its inventory. stocks with the following characteristics: a) Calculate the EOQ for workbooks? b) What are the annual holding costs for the workbooks? c) What are the annual ordering costs? . a small manufacturer of electronic research equipment. He has determined that: 12.

6 If D= 8.7 Henry Crouch’s law office has traditionally ordered ink refills 60 units at a time. what would the optimal order quantity be? . The firm estimates that carrying cost is 40% of the $10 unit cost and the annual demand is about 240 units per year. Her best-selling bed has an annual demand of 400 units. a) How many units should be ordered each time and order is placed? b) If the Holding cost per unit was $6 instead of $5.000 per month. ordering cost is $40 and holding cost is 5% per unit per year.12. what is the economic order quantity? 12. What value of ordering cost would its action be optimal? 12.8 Madeline Thimme’s Dream Store sells water beds and assorted supplies. and H= $2 per unit per month. S=$45 per order.

Southeastern estimates its annual holding cost for this item to be $25 per unit.9 Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15.12.000 units. a) b) c) d) Find the economic order quantity Find the annual holding cost Find the annual ordering costs What is the reorder point? . The cost to place and process an order from the supplier is 8 working days.

Dana Duncan operates her business 300 days per year and finds that deliveries from her supplier generally take 5 working days.11 Annual demand for the notebook binders at Ducan’s Stationary Shop is 10. What would be an appropriate reorder point? 12.10 Lead time for one of your fastest moving products is 21 days.000 units.12. Calculate the reorder point for the notebook binders that she stocks. . Demand during this period averages 100 units per day.

The demand per week is 80. the average ordering cost is $25 per order. and the inventory carrying cost is $9. Furthermore.Marilyn Hart is the purchasing agent for Central Valve Company.000 units. a) b) c) d) What is the economic order quantity? What is the average inventory if the economic order quantity? What is the optimal number of orders per year? What is the optimal number of days between any two orders. The annual demand is 4. it takes about 5 working days for an order to arrive from the supplier. assuming 250 working days per year? e) What is the total annual inventory cost? f) What is the reorder point? . The cost of each valve is $90. . Marilyn has made a study of the costs involved in placing an order for any of the valves that Central stocks.12.12. which sells industrial valves and fluid control devices.

Joe Henry’s machine shop uses 2. Theses brackets are purchased from a supplier 90 miles away.500 brackets during the course of a year.12. .13. The following information is known about the brackets: a) b) c) d) e) f) What would be the economic order quantity? What would be the average inventory? What would be the annual inventory holding cost? How many orders would be made each year? What would be the annual order cost? What is the reorder point? .

Identify the economic order quantity and consider the implications for making an error in calculating order quantity . 50. 40.12. and 100.200 of a certain spare part that costs $25 for each order with an annual holding cost of $24   Calculate the total cost for order sizes of 25.14 Myriah Fitzgibbon uses 1. 50.

16 Bruce Woodworth’s company produces a product for which annual demand is 10. Daily production is 200 units. Because it operates 200 days per year. Holding cost is $1 per unit per year. Determine what the ordering cost would have to be? 12. demand is about 50 per day. setup cost is $200. carrying cost is estimated to be $1 per unit per year.000. The annual demand of one of the components is 250 units.12. If you wish to produce this product in batches. what size batch should be used? .15 M. and the ordering cost is $20 per order a) b) c) d) How many units should be ordered each time an order is placed? How many orders per year are needed with the optimal policy? What is the average inventory if costs are minimized? Suppose that the ordering costs are not $20. and Pattersson has been ordering 150 units each time. Cotteler Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances.

including the cost of the lights? .17 Redovilsky Manufacturing Company. The holding cost is $0. a) b) c) d) What is the optimal size of production run? What is the average holding cost per year? What is the average setup cost per year? What is the total cost per year. in Hayward makes flashing lights for toys. Setting up the light production costs $50.000 flashing lights per year and has the capability of producing 100 per day. It has orders for about 12. The company operates in production facility 300 days per year. The cost of each light is $1.10 per light per year.12.

Wheel-Rite can produce 500 wheel bearings per day.000 wheel bearings each year. Cal-Tex is a just in time manufacturer and requires that 50 bearings be shipped to it each business day.60 per wheel per year. with 10. Wheel.12. A larger assembly. a small producer of metal parts.Rite supplies Caltex.Rite? . a) b) c) d) What is the optimum production quantity? What is the maximum number of wheel bearings that will be in inventory at Wheel? How many production runs of wheel bearings will Wheel-Rite have in a year]? What are the Total Setup + Holding cost for Wheel.18 Meiners is the production manager of Wheel.Rite. Setup cost for Wheel is $40 and holding cost is $.

The cost of a pump is $50.12. If pumps are ordered in quantities of 200.20 McLeavey Manufacturing has a demand for 1. It currently faces the following ordering decision relating to purchases of CD-ROMs. 12. and carrying costs is 25% of unit cost. Should it order 200 pumps at time and take the 3% discount? .19. It costs Mc Leavey $40 to place an order. supplies both educational and commercial customers with memory ans storage devices.000 pumps each year. McLeavey can get a 3% discount. Cesar Rogo a Mississippi chain of computer hardware and software retail outlets.

On orders of 100 units or more. and ordering cost is $25 per order. On orders of $75 units or more. Inc. and its ordering cost }410. If Ping Wang. he can get a 5% discount on the cost of the detectors.400 units. What should Sound Business. the price is discounted to $18. has an inventory carrying costs of 5% per unit per year. a manufacturer of hight fidelity components. Should Wang take the quantity discount? 12.. Carrying cost is estimated to be 20% of the unit cost.21 Wang Distributors has an annual demand for an airport metal detector of 1. Sound Business. Annual demand is 45 components. The cost of a typical detector to Wang is $400.22 The regular price of a DVD component is $20. do? .75.50. orders in quantities of 300 or more. the discount price is 415. Inc.12. At present. the owner.

How many tires should Rocky order each time? .000 or more tires are ordered. and the holding cost is 20%of the purchase price of the tires per year.23 Rocky Mountain sells 20.000 tires are ordered and $17 per tire if 1. The ordering costs for each order are $40.12. but fewer than 1. $18 per tire if 500 or more. The purchase price is $20 per tire if fewer than 500 tires are ordered.000 tires of a particular type per year.

The demand is 700 units per month.60 15.10 .50 15. The item can be purchased from either Allen Manufacturing or Baker Manufacturing.12.000 + Unit Orice 16 15. Ordering cost is $50.00 BAKER MFG Quantity 1-399 400-799 800 + Unit Price 16. an annual holding cost is $5 ALLEN MFG Quantity 1-499 500-999 1.24 Van Oyen has gone out on bid for a regulator component.10 15.

50 400-+ 31.55 150-299 32.50 Vendor C Quantity Price 1-99 $34-50 100-199 33. Inc has summarized the price list from four potential suppliers of an underground control valve. Annual usage is 2. order cost is $10 per order.400 valves.35 300-499 31.33 per unit Vendor A Quantity Price 1-49 $35 50-74 34.80 300-499 31. and annual inventory holding costs are $3.75 75-149 33.75 Vendor B Quantity Price 1-74 $34.15 500 + 30.75 200-399 32.00 150-299 32.10 Vendor D Quantity Price 1-199 $34.75 75-149 34.60 500 + 30.25 Cris Dandving Irrigation.12.00 .25 200-399 33.00 400 + 31.

50 Quantity 1-399 400-799 800 + 1199 1.10 16. the order cost is $50 per order.25 a) b) c) d) What is the economic order quantity for both suppliers? What quantity should be ordered and which supplier should be used? What is the total cost for the most economic order size? What factors should be considered besides total cost? .000 + Unit Orice $17. estimates the holding cost to be 50% of the purchase. VENDOR 1 Quantity 1-499 500-999 1.12.60 16.75 16.85 16. Emeryt uses 800 pounds per month of the chemical.200 + VENDOR 2 Unit Price $17.26 Emercy Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled.00 16.

Ags. 01 de noviembre del 2012 .Daria Marlene Rodríguez Olvera Supply Chain Management Teacher: Hiemy Shu Lara Problems “Inventory and Production” Aguascalientes.

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