EBTM365_Ex3_PracticeProblems-Answers

EBTM365_Ex3_PracticeProblems-Answers - a robotics...

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EBTM 365 Section 3 Review Problems - Answered 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? 2 Q h b. What is the annual ordering cost function? D S Q c. What is the annual total cost function? 2 Q D TC h S Q = + d. What is the recommended EOQ? 2 2(10,000)(25) 158.11 158 units 20 DS h = = = e. Based on your recommended EOQ, how many orders will be placed annually? 10,000 63.29 63 orders 158 = = f. What is the total annual expense related to ordering and carrying airbags in inventory? 158 10,000 20 25 $1,580 $1,582 $3,164 2 2 158 Q D TC h S Q = + = + = + =
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2. Using the basic EOQ model:
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Unformatted text preview: 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? 2 2(120)(25) 17.32 17 20 DS h = = = What is the total annual cost for ordering and holding inventory? 17 120 20 25 $170 $176.47 $346.47 2 2 17 Q D TC h S Q = + = + = + = 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)? **Simple Reorder Point with specified safety stock** ( 29 ( 29 * safety stock = 4*2 2 10 ROP LT d = + + =...
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This note was uploaded on 05/14/2010 for the course EBTM 365 taught by Professor Porterfield during the Spring '10 term at Towson.

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EBTM365_Ex3_PracticeProblems-Answers - a robotics...

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