Determine the optimal reorder quantity

Assignment Help Operation Management
Reference no: EM13959096

An automotive repair shop stocks many sizes of tires. One particular size and model is purchased for $15 and sold for $30. The manager estimates the cost to order at $75, including the delivery charge and paperwork. Using the cost of rent, interest, and utilities, the manager estimates the cost of carrying inventory at approximately 50% per year based on average inventory value. The shop sells approximately 2,000 of these tires per year. Orders are received two weeks after an order is placed.

(a) Determine the optimal reorder quantity

(b) Determine the optimal reorder point.

(c) What is the total cost associated with the optimal (Q, r) policy?

(d) What is the average time between orders?

(e) How many orders are placed per year?

(f) Suppose the repair shop orders 150 tires at a time. What is the increase in cost versus an optimal order quantity?

Reference no: EM13959096

Explain the differences between primary and secondary data

Explain the differences between primary and secondary data in the marketing research process. Also, if you are planning on marketing a food product in Japan, which type of dat

How many minimum hours of full-load operation per year

Two 180-horsepower (HP) motors are being considered for installation at a municipal sewage-treatment plant. The first cost $6,100 and has an operating efficient of 77%. how ma

Utilizing the HEDIS measures

A family physician sees approximately 29 patients per day (Gottschalk and Flocke 2005, 490-491). Of these 29 patients per day, 5 are Medicaid patients and 3 of those Medicaid

How many drives should be carried as safety stock

Based on available information, lead time demand for pc jump drives averages 49 units (normally distributed), with a standard deviation of 5 drives. Management wants a 90% ser

How does the diversity of a group affect its performance

What are group norms, and what role do they play in behavior and cohesiveness of the group? How does the diversity of a group affect its performance? How are the three charact

What is the maximum number of parts in inventory

A company can produce a part it uses in an assembly operation at the rate of $50 an hour. The company operates 8 hours a day, 300 days a year. Daily usage of the part is 300 p

Determine the utilization and the efficiency

Determine the utilization and the efficiency for each of these situations: A loan processing operation that processes an average of 5 loans per day. The operation has a design

Company plan to acquire to satisfy predicted demand

A company manufactures a product using machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. How many cells shoul


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd