Pi Practice Problems: Chapter 12 Inventory Management ‘roblem 1: ABC Analysis oak Shunk Les oe sual = (chewed K Yusit Fok? cunnad doller bate. A104 80 y 402 = B2aao iG es 205120 m 807 «>| GL GO : Az 10-20% OL hens x104 150 x 10.00 = (soo 60-107, + uses 180 x 4050s 60715 Bi Tahevnediobe 1205, 50 x 60.70 = 3085 CL pe 7% of Vhews $104 20 « «80.20 im l6ou (o-2vy% of $ 205 20 x 80.15 = 1603 Lio4 100 «20.05 = gooSs Sort in descending over tem). Anus % of $ usage Cum. % of§ Cum. %no.ofitems Glass |, pas 9640 EEC x00= 33-7] BT parents. x a. Uaoy 6015 PPIE won Ql. Su.87. Bxeer2s7. A B. Aiete Bare = Way. b6/. 72757, B | &. baed 3035 210.6% abit 260% B s. L194 Aes = Ge B3.LY 025% C 6. Slee 16044 26.67. 4.27. 815% C 4. Xa0s 1603 JS 94.81. ey B.K104 1500 = Say 1007 200of, a | Som> $20,732 Somz (007 | %Problem 2: Given, Demand = 360, Holding cost = $0.80/unit/year, Ordering cost = $100 per order. What is the E0Q? ee Annual = 2 Give! An Reward sone : He Fo.80/mrh /yeaw, S= 0.86 S EOoR= Qo one Problem 3: Given the data from Problem, and assuming a 250-day work year; how many orders should be processed per year? What is the expected time between gee e Average Number of oxdlov’ [yeow = = = BS 212 ev elers year ; Rg Q Time betwee oelers = Cycle time = a ov a 2 = 3E2 2), weld over eWcas etter poeta a Sree soo, = Cycle Hime = aap = On 8s yams tee - we Tresee/ 5 208.3 ays Problem 4: What is the total cost for the inventory policy used in Problem 3? Prank Tot corte = Anna’ ets) 4+ fon Se Ce La + zs ee ae BO ao) °° eee Ora ey eeToe? tte Ly. 2s Problem 5: Assume that the demand was actually higher than estimated (i.e., 500 units instead of 360 units). What will be the actual annual total cost? Assume , Ses Seo , Qs Hil Beco CoO a loo= #236.67 eG = ae R>B00 Fw Dz Seo, @ BShonld have beer = )e. os Sy) We = toga. By gore ——Problem 6: Assume that our firm produces type C fire extinguishers, We make 30,000 of these fire extinguishers per year. Each extinguisher requires one handle (assume a 300 day work year for daily usage rate purposes). Assume an annual carrying cost of $1.50 per handle; production setup cost of $150, and a daily production rate of 300. a. What is the optimal production order quantity? b. Determine (i) Inax (ii) average inventory, (iii) number of batches per year, (iv) cycle time, (v) run time, and (vi) the annual total cost. Given: Ds 30000, 1 yews toodays, Us ae tee / clog + He $1. so/unit/yerr, Ssise, p= poo [dow Note: PPA @ POR > Rp = 2PS | P _ [alseecd)ise | g00 H J peu” so Boostoo gi sines oe Cp-%) Znnan Geter (ee =) (300-108) = Qooe Gin Average Inve tony > Zmnase a eee 2 a GHD Wo. of babes Yea = ro = P @? Cycle Le Ore Gareae tect ame eo) leria a ©) Rum He Se ( Production Gime). Pe @ Annuak total cor€ = = Hee a -- C=) 50 + (2222) 150 1.€. © [S00 + (Se0 = areProblem 7: ‘We need 5,000 special valve units per year. The ordering cost for these is $100 per order and the carrying cost is assumed to be 25% of the cost per unit. Price schedule is as given below. Quantity range Proeunit Giver T>= Sov0, S= *l00 1-149 Cy Sse A 150 - 399 7000 He asxyok PF) P= Unih poe 400 and above 68.00 ? : ee ee Q FRR pe ancl. pre break: @-rouge RP He2sxP @? (ee . Cactidabe & l-14q #80 0.25 (0D Z (see0) oo bes, WLeIe 4 eas = Faa4 sim aay ZUL ignore this eho = 399 é€ 237) Zbseedioo usse, ULF ~ 344 7 Oa Pest e g 4 a = ¥\9.50 1750 5a ese = 2 Gudidate R= 234 f eaiicesehIEs #48 2.2568) seen ee aus Ueaco mod, 2400 24iq - 2a 3 6 LL, teehee G@-didake = 400 Stepr: Compube tie fetal anual ant all ke a cldales Orch Atel He R Wit the leak por laess Ear . 2 : orden Acura Tekh covt = Arnal, Weld “per Reece Sq aoe Geet BH+Bs+ pp Comdste & Tete come eee ee Q= 239 @PFo 34) (4, S000 +10 (seem) and iH: 417.50 — tea ee ire. = 2041. 26 2882..08-+ 850000 = [854/830 & Q= 400 @ P= 68 (S28) 1+(E222 100 + 68 (soo) and He #17 oe be. = Shoor lase + 340000 = Fauy, 50 Tel Cott for Q= hon < Total Cost for R251, EOR= 400 @ P= Fes /unitr aoeeee et fee qrontity ogc. pe UL = Upper limit of the goronhiy Wage fe pe pay B= Quan HS fom WAG Ys a aoa ow @ILQrUL, te iquoe Hee phe w cane ree eee Cl Fornuh & didote Qe LL © FP Coie) Tan Crm