SCM 370 -Homework 5 Inventory Management 1. Each year the Bluestone Company purc
ID: 352628 • Letter: S
Question
SCM 370 -Homework 5 Inventory Management 1. Each year the Bluestone Company purchases 2,793 bridles at a cost of $56.99 each. The cost of placing an order is $32, and the cost to hold the item for a year is 18% of the unit cost. Each year has 240 working days. Determine the economic order quantity, in bridles. a.240 bridles b. 183 bridles c. 132 bridles d. 114 bridles e. 97 bridles For the conditions of problem 2, what is the average number of bridles in inventory, assuming that the minimum inventory level is zero 132 bridles. c. 3,76 bridles d. 4,793 bridles e. 4,827 bridles A firm desires to control inventory levels so as to minimize the sum of holding and ordering costs. The firm estimates its inventory holding costs at $a/unit/year, and ordering cost at $50/order. Weelkly demand is fixed at 200 units and there are 50 weeks in the work year. (QUESTIONS 3, 4, 5) 3. a. What is the economical ordering quantity? 50 b. 1000c. 2000 d. 250 e. 500 4.What is the total annual holding cost? a. 50 b. 1000c, 2000 d. 250 e. 500 5. What is the total annual ordering cost? a. 6. If the Lead Time is exactly 4 weeks, and demand is known to he exactly 10 units per weck, then the reorder poin (ROP) should be: b.10 a. 20 d 40 44Explanation / Answer
Daily Demand, d= 2793/240 = 11.64
Item Value , C = $56.99
Orderig Cost, S = $32 per order
Holding Cost , I = 18% per year = .18/240 =0.00075
Economic order Quantity , Q = sqrt(2*d*S/(I*C)) = 132
Answer C - 132 bridles
2. Average Inventory AIL = Q/2 = 132/2 = 66
Answer - A) 66 bridles
3.
No of weeks in year - 50
Inventory Holding Cost , IC = $4 unit per year= $ 4/50 unit per week
Ordering cost, S = $50 per order
weekly demand, d= 200
Economic order Quantity , Q = sqrt(2*d*S/(I*C)) = 500
Answer C = 500
4. Average Inventory, AIL = Q/2 = 250 per week
Average Inventory = 250
Annual Holding cost = 4 *250 = 1000
Answer B
5. Annual Ordering cost = (Anuual Demad ,D/Q)* S = (50*200/250)*50 = 2000
Answer C
6. LT = 4 , d= 10
ROP = d*LT +z*sd'
In this case sd' = 0
ROP = d*LT = 40
Answe d 40
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.