A manufacturer has a production facility that requires 10,237 units of component JY21 per year.Following a long-term contract, the manufacturer purchases component JY21 from a supplier witha lead time of 6 days. The unit purchase cost is $31.4 per unit. The cost to place and process anorder from the supplier is $168 per order. The unit inventory carrying cost per year is 12.2 percentof the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model isappropriate. If the manufacturer uses a constant order quantity of 1,053 units per order, what isthe annual holding cost?Use at least 4 decimal places.

Given that: EOQ= 1053 units Unit Price = $31.4 Holding cost per unit (H)= 12.2% of 31.4 = 3.8308…

Answered: Ime of 6 days. purchase cost is $31.4…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Maxantene Products buys 300,000 units of a crucial input per year from a supplier that fulfills its orders within two days after receiving them. Maxantene Product submits its orders directly to the supplier through a Web interface, so its lead time is the supplier two day turnaround time. Each order cost Maxantene Products about P500 to place, while carrying cost are about P60 per unit per year. The company seek to maintain a five day usage level in a safety stock. Assume a 365 day year. ------------- a.What is Maxantene Products economic order quantity for this input? b. What is Maxantene Products' carrying cost at the EOQ? * c. At what inventory level of this input should Maxantene re-order?
A manufacturer has a production facility that requires 15,604 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 7 days. The unit purchase cost is $25.6 per unit. The cost to place and process an order from the supplier is $121 per order. The unit inventory carrying cost per year is 10.5 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 2,640 units per order, what is the annual holding cost? Use at least 4 decimal places.
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Once issued, the purchase order becomes the basis for managing the purchasing relationship on an ongoing basis True False
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