Question 1

What is ABC Widget Company's inventory turns if it sells goods whose cost is $7,350,000 and its average inventory is $1,225,000?

Accepted Answer

The answer of What is ABC Widget Company's inventory turns...

Question 2

The inventory method that places a maximum order when the on-hand inventory falls below a predetermined minimum level is called the ____________.

Accepted Answer

The answer of The inventory method that places a maximum...

Question 3

Consider a periodic review system with a lead time of 2 weeks, a review period of 4 weeks, average weekly demand of 100 units, standard deviation of weekly demand of 20 units, and a desired cycle-service level of 90%. (a) What is the target inventory level? (b) If it is time to review the item and 10 units are on hand, how many units should be ordered?

Accepted Answer

The answer of Consider a periodic review system with a...

Question 4

What is the total annual inventory cost (using basic EOQ )of a product whose annual demand is 12,000 units, daily demand is 40, daily production is 60, order cost is $80, and holding cost is $6? (Round to the nearest dollar.)

Accepted Answer

The answer of What is the total annual inventory cost...

Question 5

How much safety stock should an organization hold if it wants to provide a 95% order-cycle service level for an item whose annual demand is 12000 units with standard deviation of 300 units per year and 30 units during lead time. The organization uses 1.96 standard deviations for this purpose.

Accepted Answer

The answer of How much safety stock should an organization...

Question 6

For a continuous review policy, if the standard deviation of replenishment lead time is 171.58 units and 266 units of safety stock are held, what is the implied order-cycle service level?

Accepted Answer

The answer of For a continuous review policy, if the...

Question 7

What is the maximum inventory of a product that is produce in batches of 1000 when 500 units are produced per day and 250 units are sold per day?

Accepted Answer

The answer of What is the maximum inventory of a...

Question 8

The reorder point for a product that is delivered two days after an order is placed and whose average daily demand is 100 is __________________.

Accepted Answer

The answer of The reorder point for a product that...

Question 9

What is the basic EOQ for a product whose annual demand is 48000 with setup cost $15 and holding cost $5?

Accepted Answer

The answer of What is the basic EOQ for a...

Question 10

Troy Enterprises uses a continuous review inventory control system. The firm operates 50 weeks per year, with an annual demand of 50,000 units, an ordering cost of $35 per order, a holding cost of $1 per unit per year, a lead time of 3 weeks, and a standard deviation of demand during lead time equal to 216.51 units.
(a) How many units should be ordered at a time (rounded to the nearest unit)?
(b) What is the reorder point if a 94% order-cycle service level is desired?

Accepted Answer

The answer of Troy Enterprises uses a continuous review inventory...

Question 11

Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order
(a) What is the economic order quantity for your product?
(b) What is the total annual cost of ordering and holding?
(c) Now suppose that instead of purchasing the product, you decide to produce it yourself. Assume the same demand and cost structure as above. In addition, your average production rate would be 200 units per day, and you have 200 working days per year. What batch size should you use?
(d) Given your answer to part c, now what is the total annual cost of ordering and holding?
(e) What conclusions can you make regarding the impact of production rate on the holding and ordering costs?

Accepted Answer

The answer of Suppose that your company sells a product...

Question 12

For a continuous review policy, 92% order-cycle service level, and standard deviation of replenishment lead time of 189.31 units, how many units of safety stock should be held?

Accepted Answer

The answer of For a continuous review policy, 92% order-cycle...

Question 13

The textbook discusses that in the service industry it is not uncommon for retailers not to be able to __________ specific merchandise.

Accepted Answer

The answer of The textbook discusses that in the service...

Question 14

What is the EPQ for a product whose annual demand is 48,000 with setup cost = $15, holding cost = $6, daily demand 1,250, and daily production = 1500?

Accepted Answer

The answer of What is the EPQ for a product...

Question 15

What is the total annual inventory cost (using basic EPQ )of a product whose annual demand is 15,000 units, daily demand is 40, daily production is 60, order cost is $80, and holding cost is $6? (Round to the nearest dollar.)

Accepted Answer