to accompany CHAPTER 12: Inventory Management
Additional Homework Problems
12.41
Barbara Flynn’s company has compiled the following data on a small set of products:
Item
Annual Demand
Unit Cost
A
100
$300
B
75
100
C
50
50
D
200
100
E
150
75
Perform an ABC analysis on her data.
12.42
Judy Stamm opened a new beautyproducts retail store. There are numerous items in inventory, and
Judy knows that there are costs associated with inventory. However, because her time is limited, she cannot
carefully evaluate the inventory policy for all products. Judy wants to classify the items according to dollars
invested in them. The following table provides information about the 10 items that she carries:
Item Number
Unit Cost
Demand (units)
E102
$4
800
D23
$8
1,200
D27
$3
700
R02
$2
1,000
R19
$8
200
S107
$6
500
S123
$1
1,200
U11
$7
800
U23
$1
1,500
V75
$4
1,500
Use ABC analysis to classify these items into categories A, B, and C.
12.43
If
D
= 1,000 per year,
S
= $62.50 per order, and
H
= $.50 per unit per year, what is the economic
order quantity?
12.44
If the economic order quantity = 300, annual demand = 8,000 units, and order costs = $45 per order,
what is the holding cost?
1
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View Full Document12.45
George Heinrich uses 1,500 per year of a certain subassembly that has an annual holding cost of
$45 per unit. Each order placed costs George $150. He operates 300 days per year and has found that an
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 Fall '10
 b
 Annual demand, Judy Stamm

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