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EBTM365_Ex3_PracticeProblems(2) - in inventory 2 Using the...

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EBTM 365 Section 3 Review Problems 1. Antar Auto installs 10,000 replacement airbags per year, which it orders direct from the manufacturer. The airbags are used at a steady rate during the 240 working days of the year. It costs $20 per year to keep one in inventory and it costs $25 to place an order. a. What is the annual carrying cost function? b. What is the annual ordering cost function? c. What is the annual total cost function? d. What is the recommended EOQ? e. Based on your recommended EOQ, how many orders will be placed annually? f. What is the total annual expense related to ordering and carrying airbags
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Unformatted text preview: in inventory? 2. Using the basic EOQ model: a robotics integrator uses 120 micro processors annually, ordering costs are $25, annual holding costs are 10%, each micro processor costs $200. What is the recommend EOQ? What is the total annual cost for ordering and holding inventory? 3. The manager of Joe’s Transmission Repair requires a safety stock of 2 Ford Taurus transmissions in stock at all times. Weekly demand for Ford Taurus transmissions is 2 and the lead-time from the re-manufacturer is four weeks. What is the reorder point (Basic ROP)?...
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