Manfred Manufacturing is involved in the production of machine parts. The company uses 600,000 pounds of
steel annually. The current purchasing cost for steel is $3.20 per pound. The carrying cost for inventory is 10
percent of the purchase price.
The cost of ordering steel is $800 per order. The company has decided to maintain
a safety stock of 15,000 pounds. The delivery time per order is 6 days. The company works 365 days a year.
a. Determine the optimal EOQ.
b. How many orders will be placed annually?
c. What is the average inventory?
d. What is the inventory order point? (That is, at what level of inventory should a new order be placed?)
e. What is the company's total inventory cost for the year?
a. Q* = 2(600,000)($800)
(.10)($3.
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____________________ benefits can be measured and expressed in financial terms, while ____________________ benefits cannot be easily measured and/or quantified
Fill in the blank(s) with correct word
____ occurs when a supervisor or team leader listens to a live or recorded call in order to measure the quality of an analyst's performance during the call.
A. Observing B. Evaluation C. Role playing D. Monitoring
An advantage of maintaining a large inventory is _____
a. customer satisfaction b. a high stock turnover rate c. fresh merchandise d. low insurance costs
The Lagrange multiplier is:
A) the shadow price for the constraint coefficients. B) valid over a range of changes in the RHS. C) the rate of change in the objective value as the RHS of the constraint increases. D) the minimum threshold for decision variables to enter the solution.