homeworknr5.docx
Homework Nr 5.
Inventory Management. ABC classification. ROP
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1. The following table contains figures on the monthly volume and unit costs for a random sample of 16 items from a list of 2,000 inventory items at a health care facility. Develop an A-B-C classification for these items (determine the percentage of items in each category and the annual dollar value for each category):
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(4 points)
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2. A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag.
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a.
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Determine the economic order quantity.
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b.
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What is the average number of bags on hand?
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c.
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How many orders per year will there be?
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d.
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Compute the total cost of ordering and carrying flour.
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e.
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If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
(6 points)
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3. A manager receives a forecast for next year. Demand is projected to be 600 units for the first half of the year and 900 units for the second half. The monthly holding cost is $2 per unit, and it costs an estimated $55 to process an order.
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a.
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Assuming that monthly demand will be level during each of the six-month periods covered by the forecast (e.g., 100 per month for each of the first six months), determine an order size that will minimize the sum of ordering and carrying costs for each of the six-month periods.
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b.
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Why is it important to be able to assume that demand will be level during each six-month period?
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c.
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If the vendor is willing to offer a discount of $10 per order for ordering in multiples of 50 units (e.g., 50, 100, 150), would you advise the manager to take advantage of the offer in either period? If so, what order size would you recommend?
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(5 points)
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4. A manager receives a forecast for next year. Demand is projected to be 600 units for the first half of the year and 900 units for the second half. The monthly holding cost is $2 per unit, and it costs an estimated $55 to process an order.
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a.
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Assuming that monthly demand will be level during each of the six-month periods covered by the forecast (e.g., 100 per month for each of the first six months), determine an order size that will minimize the sum of ordering and carrying costs for each of the six-month periods.
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b.
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Why is it important to be able to assume that demand will be level during each six-month period?
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c.
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If the vendor is willing to offer a discount of $10 per order for ordering in multiples of 50 units (e.g., 50, 100, 150), would you advise the manager to take advantage of the offer in either period? If so, what order size would you recommend?
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(5 points)
Yhtomit
