4915082

Lead time
2 weeks
Error
500
750
1000
1200

cost

D
$0.12

times
50%
25%
15%
10%

60000

Avg. req./dDemand dev

500
2400

2400
2900
3150
3400
3600
3090

96000000%

4569802

Packaging and no manufacturing

Supplier
(shrink wrap m/c)
D Price
Addi Cost Total cost
1000
$0.70
$0.40
1100

Quantity Discounts

D=

10,000 units

Ist supplier ( all units discount structure)

Unit Price
D
S
<= 100
5
10,000
101-500
4.75
10,000
500-1000
4.5
10,000
>1000
4
10,000
Q
sqrt(2D * So/Ex)

Q1
Q2
Q3

Q
399
410
501

Cost
56501
53681
50825

H
10
10
10
10

Q
1.25
1.1875
1.125
1

400
410
422
447

Q4
C=

1001
Q/2*H+D/Q*S+P*D

45100

Several items ordered together

Fixed cost
$400.00
Demand Unit PriceVariance
1000
$10.00
100
1000
$10.00
100
500
$30.00
81

P1
Annual Demand (units)
Unit Cost ($)
Variance / per week
Lead time (weeks)

P2

P3

Total

1,000
10

1,000
10

500
30

2,500
14

100

100

81

96.2

A 95% confidence interval is assumed and based on the variance

value given the safety stock is calculated
Safety stock
40.4
40.4
36.4
Order Qty / per order
Number of Orders
Annual Purchase Cost
Ordering Cost
Holding Cost
Total Cost

306.1

306.1

153.1

3.3

3.3

3.3

10,000
535.7
382.7

10,000
535.7
382.7

15,000
267.9
574

Cost per order = $10

Shipping cost = $400
Total order cost = $410
There are 3 parts and let they be P1, P2 & P3.
Total no. of units = 1000+1000+500 = 2500

765.3

1,339.30
1,339.30
37,679

Average unit cost = [1000*10+1000*10+500*30]/2500 = $14

Actually demand greated than 2400

> 50 % times

Inhouse
D
Time valued
Mat cost/unit
Dir.lab cost /unit

1000
$40.00
$0.10
$0.30

No, of parts
processed
Chngeover
Total Price

10 units
60 min
$800.00

1 unit =

10 connectors

II nd supplier ( incrementally)
Unit Price
100
5
the next 400
4.75
the next 500
4.5
units over 1000
4

5100000
4750000
350000

294736.8
542.8967

All three are

ordered in case one
reach the RP point,
Ordered qty
(inventory -EOQ),
six weeks to arrive
EOQ

P1
Annual Demand
(units)
Unit Cost ($)

P2

P3

Total

1,000
11

1,000
11

500
31

2,500
15

100

100

81

96.2
1

Variance / per week

A 95% confidence
interval
is assumed
Lead time
(weeks)
and based on the
variance value
given the safety
stock is calculated
Safety stock

16.5

16.5

14.85

Order Qty / per

order

46.4

46.4

23.2

Number of Orders

21.6

21.6

21.6

11,000
86.21
63.8

11,000
86.21
63.8

15,500
43.1
87

Annual Purchase
Cost
Ordering Cost
Holding Cost
Total Cost

116

215.5
214.6
37,930

Cost per order = $10

Total order cost = $10
There are 3 parts and let they be P1, P2 & P3.
Total no. of units = 1000+1000+500 = 2500
Average unit cost = [1000*11+1000*11+500*31]/2500 = $15