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    The document contains two sections about calculating inventory costs for a company. The first section provides information about heat sinks purchased by Custom Computers, including annual demand, ordering costs, holding costs, and unit price. It asks to calculate the average inventory level, number of orders per year, total annual inventory holding cost, total annual ordering cost, and total annual cost. The second section provides annual demand, ordering costs, holding costs, and unit prices for 10 items and asks to calculate the annual usage cost, classify the items, calculate the economic order quantity, maximum inventory investment, and average inventory level for each item.

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    The document contains two sections about calculating inventory costs for a company. The first section provides information about heat sinks purchased by Custom Computers, including annual demand, ordering costs, holding costs, and unit price. It asks to calculate the average inventory level, number of orders per year, total annual inventory holding cost, total annual ordering cost, and total annual cost. The second section provides annual demand, ordering costs, holding costs, and unit prices for 10 items and asks to calculate the annual usage cost, classify the items, calculate the economic order quantity, maximum inventory investment, and average inventory level for each item.

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    © All Rights Reserved
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    87 views1 page

    Lab 4

    Uploaded by

    Anonymous 5PBCpvvqG
    The document contains two sections about calculating inventory costs for a company. The first section provides information about heat sinks purchased by Custom Computers, including annual demand, ordering costs, holding costs, and unit price. It asks to calculate the average inventory level, number of orders per year, total annual inventory holding cost, total annual ordering cost, and total annual cost. The second section provides annual demand, ordering costs, holding costs, and unit prices for 10 items and asks to calculate the annual usage cost, classify the items, calculate the economic order quantity, maximum inventory investment, and average inventory level for each item.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Lab 4: IC

    1. Custom Computers, Inc. assembles custom home computer systems. The heat sinks
    needed are bought for $12 each and are ordered in quantities of 1300 units. Annual
    demand is 5200 heat sinks, the annual inventory holding cost rate is $3 per unit, and the
    cost to place an order is estimated to be $50. Calculate the following:
    a) Average inventory level
    b) The number of orders placed per year
    c) The total annual inventory holding cost
    d) The total annual ordering cost
    e) The total annual cost
    2. Given the following list of items,
    a) Calculate the annual usage cost of each item.
    b) Classify the items as A, B, or C.
    c) Calculate the economic order quantity for each item. (Round to the nearest whole
    number.)
    d) Calculate the companys maximum inventory investment throughout the year.
    e) Calculate the companys average inventory level.
    Item

    Annual Demand

    101
    102
    103
    104
    105
    201
    202
    203
    204
    205

    500
    1500
    5000
    250
    1500
    10000
    1000
    1500
    500
    100

    Ordering Cost
    ($)
    10
    10
    25
    15
    35
    25
    10
    20
    40
    10

    Holding Cost
    (%)
    20
    30
    30
    25
    35
    15
    20
    25
    25
    15

    Unit Price
    ($)
    0.5
    0.2
    1
    4.5
    1.2
    0.75
    1.35
    0.2
    0.8
    2.5

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