Assignment on optimal order quantities

Reference no: EM13720255

Assignment 1:

Optimal Order Quantities

In your studies this week, you found that the optimal order quantity is achieved at the point at which inventory setup cost per unit of time equals inventory holding cost per unit of time. Knowing this, your employer, a manufacturer of office chairs, asks that you determine the optimal order quantity for two suppliers of coil springs.

Your manufacturing facility operates 50 weeks a year and requires a steady supply of 1000 coil springs per week. Supplier A charges $1 for each spring, and you resell them for $4 each. The set up charge is $20 per order. An inventory carrying charge of 25% is incurred.

In a two- to three-page APA formatted paper (not including the title and reference pages), provide the following:

Complete the table and calculate the optimal order quantity for Supplier A:

Units
Setup costs
Inventory carrying cost
Show equation used with all above values filled in
Optimal order quantity of springs

Provide a similar table and calculate the optimal order quantity of springs for Supplier B. Supplier B charges $2 for each spring. The set up charge is $10 per order. All other variables remain the same as with Supplier A.
The calculations assume that you are starting with a zero inventory balance. Discuss why zero inventory balance is or is not a desirable condition in most businesses. Be sure to include at least the three benefits of lower inventory carrying costs, having an inventory safety stock, and other potential benefits or risks.

Comprise at least two scholarly sources in addition to the text to support your discussion as well as findings.

Reference no: EM13720255

Questions Cloud

Tim vermeer viewing guide : 1. How did Tim Jenison become interested in Vermeer and his work? 2. What is Tim's background? In what field did he have success?

Describe and rationalize the impact of increasing fuel price : Describe in your words the meaning of spatial/temporal integration in logistical system integration and describe and rationalize the impact of increasing fuel prices on logistics network design.

Structure of the human resource department : Question 1: Describe the Company background and the structure of the Human Resource department. Question 2: Identify and discus the different Human Resource functions carried out in this organization.

Describe inventory information delivery in organization : Today, organizations are developing techniques to reduce the levels of inventory they must maintain, and their associated costs. For example, one evolving trend is to maintain showroom inventory. Approaches such as in-transit replenishment stock a..

Assignment on optimal order quantities : In your studies this week, you found that the optimal order quantity is achieved at the point at which inventory setup cost per unit of time equals inventory holding cost per unit of time. Knowing this, your employer, a manufacturer of office chai..

Identify any challenges that less-versatile companies faces : Identify any challenges that less-versatile, less-capable companies may face, if they cannot be flexible in embracing new modes of transportation.

Ethics & social responsibility plan : How ethics, corporate social responsibility, and environmental sustainability impact strategy. •Use technology and information resources to research issues in strategic management. •Write clearly and concisely about strategic management using p..

What positive personal qualities does tim cook believe : What positive personal qualities does Tim Cook believe he developed from facing challenges related to his sexual orientation?

Research paper about your managed health care : Create thesis and outline to give direction to your research paper about your managed health care related topic

User Account

All Pages