Annual demand for an item is 40,000 units. The holding cost rate is .pdf
Annual demand for an item is 40,000 units. The holding cost rate is 30% of the item cost. Ordering costs are $60/ order. Quantity discounts are available according to the schedule below: Quantity Price per Unit ($) 1-99 90.00 100-299 85.00 300-399 80.00 400+ 78.00 a. What is the optimal order quantity? b. What is the total annual inventory cost of your policy? c. Assume 52 five-day weeks per year. If the lead-time is 5 weeks, what should the reorder point be? Solution Hi, a) optimal order quantity = sqroot(2*40000*60/(30%*78)) = 452.91 =453 units b) total annual inventory cost = Annual demand * unit cost + ordering cost*annual demand/ordered quantity + Carrying cost per unit * unit cost * average inventory per cycle =40000*78+60*40000/453+78*(453/2)*60 =$4185318 c) Reorder Point = (Lead Time + Safety Stock + Basic Stock) * Unit Sales Per Day Please provide the safety stock to calulate the re order point.
Annual demand for an item is 40,000 units. The holding cost rate is .pdf
Annual demand for an item is 40,000 units. The holding cost rate is 30% of the item cost. Ordering costs are $60/ order. Quantity discounts are available according to the schedule below: Quantity Price per Unit ($) 1-99 90.00 100-299 85.00 300-399 80.00 400+ 78.00 a. What is the optimal order quantity? b. What is the total annual inventory cost of your policy? c. Assume 52 five-day weeks per year. If the lead-time is 5 weeks, what should the reorder point be? Solution Hi, a) optimal order quantity = sqroot(2*40000*60/(30%*78)) = 452.91 =453 units b) total annual inventory cost = Annual demand * unit cost + ordering cost*annual demand/ordered quantity + Carrying cost per unit * unit cost * average inventory per cycle =40000*78+60*40000/453+78*(453/2)*60 =$4185318 c) Reorder Point = (Lead Time + Safety Stock + Basic Stock) * Unit Sales Per Day Please provide the safety stock to calulate the re order point.
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Annual demand for an item is 40,000 units. The holding cost rate is .pdf
- 1. Annual demand for an item is 40,000 units. The holding cost rate is 30% of the item cost. Ordering costs are $60/ order. Quantity discounts are available according to the schedule below: Quantity Price per Unit ($) 1-99 90.00 100-299 85.00 300-399 80.00 400+ 78.00 a. What is the optimal order quantity? b. What is the total annual inventory cost of your policy? c. Assume 52 five-day weeks per year. If the lead-time is 5 weeks, what should the reorder point be? Solution Hi, a) optimal order quantity = sqroot(2*40000*60/(30%*78)) = 452.91 =453 units b) total annual inventory cost = Annual demand * unit cost + ordering cost*annual demand/ordered quantity + Carrying cost per unit * unit cost * average inventory per cycle =40000*78+60*40000/453+78*(453/2)*60 =$4185318 c) Reorder Point = (Lead Time + Safety Stock + Basic Stock) * Unit Sales Per Day Please provide the safety stock to calulate the re order point