Calculate the reorder point

Assignment Help Project Management

Reference no: EM131177611

A popular item stocked by the Fair Deal Department Store has an annual demand of 600 units. The cost to purchase these units from the supplier is $20 per unit and $12 to prepare the purchase order. The annual inventory holding cost is 20 percent of the purchase cost. The manager tries to maintain the probability of stockout at 5 percent or less. Lead time demand is uniform, between 30 and 70 (i.e., the probability of lead time is 1/41 .0244 for demand 30, 31, . . . , 70).

a. Calculate the EOQ.

b. Calculate the reorder point.

c. Calculate the safety stock.

d. If we purchase 80 units or more, the unit purchase cost is reduced to $19. Calculate the EOQ for this quantity discount case.

Reference no: EM131177611

Questions Cloud

Determine whether directed graph shown has an euler circuit : Determine whether the directed graph shown has an Euler circuit. Construct an Euler circuit if one exists. If no Euler circuit exists, determine whether the directed graph has an Euler path. Construct an Euler path if one exists.

Discuss the application of strengths to the activity : Select one of the instruments from your research and complete the test to determine your strengths. Then do the following: Evaluate your results and create a list of your personal signature strengths.

What is the average annual cost of maintaining the inventory : What is the average annual cost of maintaining the inventory?- What is the best order quantity? - Determine the EOQ.

How you address issue of malnutrition with immigrant clients : How would you address the issue of malnutrition with immigrant clients? What sort of strategies could you utilize to help you incorporate the client's cultural preferences within the nutritional plan you are designing?

Calculate the reorder point : Calculate the EOQ. - Calculate the reorder point. - Calculate the safety stock. - Calculate the EOQ for this quantity discount case.

What are the principles behind facebooks interview process : What are the principles behind Facebook's interview process? Do you think it is too complex? Explain. What does the interview process tell you about Facebook's culture? Explain.

Three buyer concerns : Many buyers' concerns revolve around a need for the product, the price of the product, and/or time ("I want to think it over"). How might you negotiate these three buyer concerns?

Define nature and all dimensions of three ethical issues : Identify the ethical code numbers and definitions of each issue presented using both the APA and ACA codes. Discuss alternative courses of action that could be taken by the counselor to rectify each dilemma. Describe the implications of each alternat..

Types of need-satisfaction presentations : Distinguish between the three (3) types of need-satisfaction presentations: informative, persuasive, and reminder. What are the guidelines to be followed when developing a persuasive sales presentation?

User Account

All Pages