Problem 12.

6
Ans:
Item Number Unit Cost Demand (Units) Annual $ Vol. % of Annual $ Classification
E102 $4 800 $3,200 53.3% C
D23 $8 1,200 $9,600 160.0% A
D27 $3 700 $2,100 35.0% C
R02 $2 1,000 $2,000 33.3% C
R19 $8 200 $1,600 26.7% c
S107 $6 500 $3,000 50.0% C
S123 $1 1,200 $1,200 20.0% C
U11 $7 800 $5,600 93.3% B
U23 $1 1,500 $1,500 25.0% C
V75 $4 1,500 $6,000 100.0% B
Total 9,400 $35,800
Problem 12.4
Ans:
Item Class Percentage of total Inventory Quantity Cycle Counting Policy (working days)
A 10% 700 20
B 35% 2450 60
C 55% 3850 120
Total 100% 7000
Number of items counted per day
35
41
32
108
Problem 12.8
Given:
D 8,000
H $2
S $45

a.)
EOQ: 600 units

b.) H doubled so:

H $4
EOQ: 424.2641 units
c.) H dropped half so:
H $1
EOQ: 848.5281 units
Problem 12.11
Given:
D 15,000
S $75
H $25
Working day 300
d 50
L 2
Ans:
a.) c.)
EOQ 300 units Annual ordering costs $3,750

b.) d.)
Annual holdings costs $3,750 ROP 100 units
Problem 12.29

Cost Factor Cost ($) Cost Factor Cost ($)

Taxes or the warehouse $ 2,000 Warehouse supplies 280
Receiving and incoming inspection $ 1,500 Research and development 2,750
New product development $ 2,500 Purchasing salaries & wages 30,000
Acct. Dept. costs to pay invoices $ 500 Warehouse salaries & wages 12,800
Inventory Insurance $ 600 Pilferage of inventory 800
Product advertising $ 800 Purchase order supplies 500
Spoilage $ 750 Inventory obsolescence 300
Sending purchasing rders $ 800 Purchasing Dept. overhead 1,000
 Inventory 10,000
No of order 200
D 1,000

Column1 Holding cost Ordering cost

$2,000 $1,500
$600 $500
$750 $800
$280 $30,000
$12,800 $500
$800 $1,000
$300
Total $17,530 $34,300

Holding cost per unit (H) $1.75

Ordering cost per unit (S) $171.50

EOQ 442 units