What is the optimal number of days in between any two orders

Assignment Help Operation Management

Reference no: EM13964542

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is a corporate operation, and there are 250 working days per year.)

A) What is the EOQ?

B) What is the average inventory if the EOQ is used?

C) What is the optimal number of orders per year?

D) What is the optimal number of days in between any two orders?

E) What is the annual cost of ordering and holding inventory?

F) What is the total annual inventory cost, including cost of the 6,000 units?

Reference no: EM13964542

Questions Cloud

Synchronizing the world of commerce : The future competitiveness of the United States in the global economy will depend upon innovation. The Module 5 lecture also mentioned logistics and briefly discussed UPS as an innovative leader in the global economy, with its motto, “Synchronizing t..

Do some of them get bigger as the car goes faster : Something makes it stop. How does an engineer use their critical thinking skills to solve these questions?

Confrontation of brutal facts-culture of discipline : Consider walgreens company as your good to great company in good to great book and identify their. Confrontation of Brutal facts, Culture of discipline.

General fund of lincoln county : Prepare the general journal entries required in the General Fund of Lincoln County for each of the following transactions. Also, use transaction analysis to show any effects on the GCA-GLTL accounts.

What is the optimal number of days in between any two orders : Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,000 units per year. What is the average inventory if the EOQ..

New concepts for the problem of dealing with leaves on lawn : Consider the task of generating new concepts for the problem of dealing with leaves on a lawn. How would a plastic-bag manufacturer’s assumptions and problem decomposition differ from those of a manufacturer of lawn tools and equipment and from those..

Are they the best structure or could they be different : What changes do you think will have occurred in the last 20 years. or since the organisation was set up. to the organisational structure. Think of ntrallsation and decentralisation as well.

Identify carbon that is responsible for its optical activity : On the structural formula in panel A, identify the carbon that is responsible for its optical activity (its chiral center) and sketch the structure of the teratogenic form of thalidomide.

Draw a diagram of the converging-diverging nozzle : Air flows through the converging-diverging nozzle. The conditions at the inlet side are at standard atmospheric conditions, while the density and the temperature at station B is 0.060 lbm/ft3 and 30.5 degree Fahrenheit

User Account

All Pages