What is the additional holding cost on account

Assignment Help Operation Management
Reference no: EM1389696

ZZZ is a specialty store that sells imported ethnic grocery items. We will consider only one product here, molasses in 10 oz. packing. The annual demand for the product is 6000 units. The store operates for 300 days of the year; the standard deviation of daily demand is 5 units of the product. Each unit of 10 oz. pack sells for $8; the holding cost is 25% of selling price. The vendor charges a flat fee of $15 per shipment; and order preparation for placing a shipment order takes 15 minutes of managerial time; the manager is paid $50 per hour.

(i) Using a continuous review model, what is the optimal quantity to order (EOQ). (10)

(ii) How many orders are placed annually? What is the annual ordering cost? (5)

(iii) Calculate the average inventory and the annual holding cost. (5)

(iv) How do the annual holding cost compare with the annual ordering cost? (5)

(v) Assume that the lead time is 3 days. What would be the ROP WITHOUT safety stock. (5)

(vi) If ZZZ should have a service rate of 98%, what would be the ROP and the associated safety stock. What is the additional holding cost on account of the safety stock.

Reference no: EM1389696

Questions Cloud

Describing the differing approaches of nursing leaders : Essay describing the differing approaches of nursing leaders and managers to issues in practice.
What is the effective capacity of the process : or the month of November, 2010, the firm has generated the 150 orders, 75 of each type. Assume one month equals 20 days. What is the effective capacity of the process
Components of the reticuloendothelial system : Define the complement cascade and there are two infection-fighting results of this cascade. What are they and discuss the main components of the reticuloendothelial system
Determine the critical value for the test : the null hypothesis is to be tested at 95% confidence. Determine the critical value(s) for this test.
What is the additional holding cost on account : what would be the ROP and the associated safety stock. What is the additional holding cost on account of the safety stock.
Determine length of the newly transposed copia element : A Drosophila P element 2.2 kb in length is modified by adding a 0.8-kb intron sequence to one of its exons. A copia element of 5.2 kb is modified through adding the same 0.8-kb intron to its central region.
Five step protocol : Using a five step protocol, you have purified an enzyme to the point where the specific activity remains constant when you perform any additional purification steps.
Specific mwr program : As a result of these actions, explain the "who, what, when, where and why" of how you would add new life into a specific MWR program to increase and continue its success?
City enjoy shopping online : A survey found that 85% of women in a given city enjoy shopping online. Suppose you randomly selected 6 women from the city and ask them whether or not they enjoy shopping online. Find the probability that exactly 4 say they enjoy shopping online.

Reviews

Write a Review

Operation Management Questions & Answers

  How has technology changed how candidates apply for jobs

How has technology changed how candidates apply for jobs? What are the pros and cons with recruitment technology?

  What is the demand during lead-time

What is the optimal interval (in working days) between orders? What is the demand during lead-time? What is the inventory position immediately after an order has been placed?

  Checking account customers

The forecast for september, which was made in August, was for 1065 checking account customers

  Illustrate what mode of transportation do to recommend coal

A power plant in California uses coal at rate of 100,000 lbs per day. Illustrate what mode of transportation do you recommend for coal and for MRO materials.

  What is the maximum number of orders waiting

What is the maximum number of orders waiting to be packed? If we double the packing capacity (from 60 to 120 orders per hour), what impact does this have on your answers in parts b, c, and d?

  Explain how to solve degeneracy in transportation problem

Write generalized form of transportation problem as LP problem. Also explain how to solve degeneracy in transportation problem.

  Target csr labor utilization rate

assuming a 90% target CSR labor utilization rate, how many telephone calls can these 3 CSRs handle during this time period.

  Explain how does an organization mission-vision

Explain how does an organization's mission, vision, goals, philosophy, managerial roles also leadership impact the design, development also implementation of an organizational security plan.

  Illustrate what is slack time for each individual activity

Shirley Hopkins is developing a program in leadership training for middle managers. Shirley has listed a number of activities that must be completed before a training program of this nature could be conducted. Illustrate what is slack time for eac..

  Each event averages four hours, and assume the stadium

Each event averages four hours, and assume the stadium is full for each event. The stadium is available 365 days a year from 6 a.m. to midnight

  There are some negotiators who will use dirty tricks

There are some negotiators who will use "dirty tricks" during negotiations to attempt to gain an advantage over the other party.

  Construct an external factor evaluation matrix

Construct an External Factor Evaluation Matrix On Microsoft. This Matrix should follow the format of the examples

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