U5-dqs

CHAPTER 9

3. Suds’s Bottling Company does bottling, labeling, and distribution work for several local microbreweries. The demand rate for Wortman’s beer is 600 cases (24 bottles each) per week. Suds’s bottling production rate is 2,400 cases per week, and the setup cost is $800. The value of inventory is $12.50 per case, and the annual holding cost is 30 percent of the inventory value. Suds’s facilities operate 52 weeks each year. What is the economic production lot size?

CHAPTER 12

2. Cyberphone, a manufacturer of cell phone accessories, ended the current year with annual sales (at cost) of $48 million. During the year, the inventory of accessories turned over six times. For the next year, Cyberphone plans to increase annual sales (at cost) by 25 percent.

a. What is the increase in the average aggregate inventory value required if Cyberphone maintains the same inventory turnover during the next year?

b. What change in inventory turns must Cyberphone achieve if, through better supply chain management, it wants to support next year’s sales with no increase in the average aggregate inventory value?