Operation Management
II
S tandard d eviation o f weekly d emand
SKU service level
WC219
$0.15
13,000
WC008
1.20
22,500
WC916
3.25
400
WC887
0.41
6;200
WC397
4.65
12,300
WC654
2.10
350
WC007
0.90
225
WC419
0.45
6,500
WC971
7.50
2,950
WC713
1 200
1,500
9 0 p ercent
C urrent o n-hand inventory 3 5 calculators
Scheduled receipts
2 0 c alculators
Backorders
Exhibit 12.13 ABC D ata f or Problem 3
3.75 calculators
2 calculators
a. What is t he Economic O rder Q uantity?
b. What is the t otal a nnual o rder a nd i nventoryholding costs for the EOQ?
c. What is t he reorder p oint w ithout s afety stock?
d. Whatis the reorder point with safety stock?
e. Based o n t he previous information, s hould a fixed o rder q uantity be placed, a nd i f so, for h ow m any c alcula to rs ?
7. Crew Soccer Shoes Company is considering a change o f their current inventory control system for soccer shoes.
The information regarding t he shoes isgiven below.
Average demand = 2 00 p airs/week
Lead t ime = 3 w eeks
O rder c ost = $ 65/order
4. MamaMia's Pizza purchases its pizza delivery boxes f rom a p rinting supplier. M amaMia's delivers on average 2 00 pizzas each m onth (assume deterministic demand). Boxes cost 2 0 cents each, a nd e ach o rder c osts $ 10 t o process. Because o f limited storage space, the manager w ants t o c harge inventory hold ingat 3 0 p ercent o f the cost. The lead time is 7 days, a nd t he restaurant is open 3 60 days per year, assum ing 3 0 days per m onth. D etermine the economic or der quantity, reorder p oint a ssuming no safety stock, nurnber o f o rders per year, a nd t otal annual cost.
5. Refer to the situation in Problem 4. Suppose the manager o f M amaMia's c urrent o rder q uantity is
2 00 boxes. H ow m uch c an be saved by a dopting a n
E OQ versus their c urrent Q = 2 00?
6. H igh Tech, Inc. is a v
S tandard d eviation o f weekly d emand
SKU service level
WC219
$0.15
13,000
WC008
1.20
22,500
WC916
3.25
400
WC887
0.41
6;200
WC397
4.65
12,300
WC654
2.10
350
WC007
0.90
225
WC419
0.45
6,500
WC971
7.50
2,950
WC713
1 200
1,500
9 0 p ercent
C urrent o n-hand inventory 3 5 calculators
Scheduled receipts
2 0 c alculators
Backorders
Exhibit 12.13 ABC D ata f or Problem 3
3.75 calculators
2 calculators
a. What is t he Economic O rder Q uantity?
b. What is the t otal a nnual o rder a nd i nventoryholding costs for the EOQ?
c. What is t he reorder p oint w ithout s afety stock?
d. Whatis the reorder point with safety stock?
e. Based o n t he previous information, s hould a fixed o rder q uantity be placed, a nd i f so, for h ow m any c alcula to rs ?
7. Crew Soccer Shoes Company is considering a change o f their current inventory control system for soccer shoes.
The information regarding t he shoes isgiven below.
Average demand = 2 00 p airs/week
Lead t ime = 3 w eeks
O rder c ost = $ 65/order
4. MamaMia's Pizza purchases its pizza delivery boxes f rom a p rinting supplier. M amaMia's delivers on average 2 00 pizzas each m onth (assume deterministic demand). Boxes cost 2 0 cents each, a nd e ach o rder c osts $ 10 t o process. Because o f limited storage space, the manager w ants t o c harge inventory hold ingat 3 0 p ercent o f the cost. The lead time is 7 days, a nd t he restaurant is open 3 60 days per year, assum ing 3 0 days per m onth. D etermine the economic or der quantity, reorder p oint a ssuming no safety stock, nurnber o f o rders per year, a nd t otal annual cost.
5. Refer to the situation in Problem 4. Suppose the manager o f M amaMia's c urrent o rder q uantity is
2 00 boxes. H ow m uch c an be saved by a dopting a n
E OQ versus their c urrent Q = 2 00?
6. H igh Tech, Inc. is a v