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    Patterson Electronics supplies circuitry components to appliance manufacturers. One component has annual demand of 250 units, constant throughout the year. Carrying cost is $1 per unit per year, and ordering cost is $20 per order. To minimize total cost, the optimal order quantity should be 250 units, requiring 1 order per year. The annual ordering cost would be $20 and the annual holding cost would be $250. If Patterson had been ordering 150 units per order, the ordering cost would need to be less than $20 for that to be optimal.

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    Patterson Electronics supplies circuitry components to appliance manufacturers. One component has annual demand of 250 units, constant throughout the year. Carrying cost is $1 per unit per year, and ordering cost is $20 per order. To minimize total cost, the optimal order quantity should be 250 units, requiring 1 order per year. The annual ordering cost would be $20 and the annual holding cost would be $250. If Patterson had been ordering 150 units per order, the ordering cost would need to be less than $20 for that to be optimal.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    29 views2 pages

    Quiz 2 Answered PDF

    Uploaded by

    Mikasa Mikasa
    Patterson Electronics supplies circuitry components to appliance manufacturers. One component has annual demand of 250 units, constant throughout the year. Carrying cost is $1 per unit per year, and ordering cost is $20 per order. To minimize total cost, the optimal order quantity should be 250 units, requiring 1 order per year. The annual ordering cost would be $20 and the annual holding cost would be $250. If Patterson had been ordering 150 units per order, the ordering cost would need to be less than $20 for that to be optimal.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    Patterson Electronics supplies microcomputer circuitry to a company that incorporates

    microprocessors into refrigerators and other home appliances. One of the components
    has an annual demand of 250 units, and this is constant throughout the year. Carrying
    cost is estimated to be $1 per unit per year, and the ordering cost is $20 per order.

    a. To minimize cost, how many units should be ordered each time an order is placed?
    b. How many orders per year are needed with the optimal policy?
    c. given the main information of the question compute the annual ordering cost.
    d. given the main information of the question compute the annual holding cost.
    e. Suppose the ordering cost is not $20, and Patterson has been ordering 150 units
    each time an order is placed. For this order policy to be optimal, what would the
    ordering cost have to be?

    c.

    d.

    e.

    This study source was downloaded by 100000825075137 from CourseHero.com on 03-24-2022 05:56:17 GMT -05:00

    https://www.coursehero.com/file/60211556/quiz-2-answeredpdf/
    Flemming Accessories produces paper slicers used in offices and in art stores. The
    minislicer has been one of its most popular items: Annual demand is 6,750 units and is
    constant throughout the year. Kristen Flemming, owner of the firm, produces the
    minislicers in batches. On average, Kristen can manufacture 125 minislicers per day.
    Demand for these slicers during the production process is 30 per day. The setup cost
    for the equipment necessary to produce the minislicers is $150. Carrying costs are $1
    per minislicer per year.

    a. How many minislicers should Kristen manufacture in each batch?


    b. What are the annual holding cost?
    c. What is the annual setup cost?
    d. What is the length of each production cycle?
    e. what is the reordering point?

    ( ) ( )

    This study source was downloaded by 100000825075137 from CourseHero.com on 03-24-2022 05:56:17 GMT -05:00

    https://www.coursehero.com/file/60211556/quiz-2-answeredpdf/
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