(34 Points) You are the inventory manager at Company Z and you have been tasked

Question

(34 Points) You are the inventory manager at Company Z and you have been tasked with developing the best ordering policy for the following 15 items; however, the company's manager wants to utilize 5,000 square feet on average. 2. Holding | Cost % perl Space Use per Unit Cost Weekly Reorder |term (square feet) 4 Item Demand Unit Cost Cost er Week 0.2% 05% 0.3% 0.7% 0.4% 0.5% 0.1% 0.3% 0.6% 0.4% $25 $60 $150 $40 $90 $250 $85 $50 $225 $75 $95 $125 $175 $55 $275 $1.50 $3.00 $6.00 $5.00 $2.25 $3.50 $1.75 $1.00 $4.5 $5.75 $9.00 $1.25 $3.75 $4.25 $5.50 2500 1750 1000 3200 1850 500 6 7 850 2 4 2775 2200 2 1380 | 0.2% 1900 2975 0.5% 0.8% 12 4 14 15 0.1% (Show all your work to receive partial credit) 875 **Your plant operates 52 weeks out of the year. Based on the capacity constraint, what is the best ordering policy for each item? Use a. Goal Seek to find the additional cost (AC) factor. b. What is the total unit cost for each item? c. What is the total holding cost for each item for both the EOQ and the constrained Q? d. What is the total reorder cost for each item for both the EOQ and the constrained Q? e. What is the total cost per item for both the EOQ and the constrained Q? f. What is the total annual cost of ordering the EOQ for all 15 items? g. What is the total annual cost of ordering the constrained Q for all 15 items? h. What is the value impact of the capacity constraint? i. Should Company Z consider renting an additional 10,000 square feet at $350,000 per year? Why or Why not?

Explanation / Answer

A.Best orderimg policy depends upon weekly demand of that items.

as cost is incured in same.

B. total cost for each item( atatched )

C. Holding cost (attached )

d. Total reoder cost (atatched)

e. Total cost per item (atatched )

f. Total cost annual cost ( atatched )

g. Attahced

h. Value impact (attached )

i. Not

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