Chapter 12 Book Problems

Chapter 12 Book Problems - Chapter 12 Book Problems...

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Chapter 12 Book Problems 1. (Problem 2) Yasuko’s Art Emporium (YAE) ships art from its studio located in the Far East to its distribution center located on the West Coast of the United States. YAE can send the art either via transoceanic ship freight service (15 days transit) or by air freight (2 days transit time). YAE ships 18,000 pieces of art annually. a) Calculate the average annual transportation inventory when sending the art via transoceanic ship freight service. b) Calculate the average annual transportation inventory when sending the art via air freight. c) What additional information is needed to compare the two alternatives? 2. (Problem 3) Joe, the owner of Genuine Reproductions (GR), a company that manufactures reproduction furniture, is interested in measuring inventory effectiveness. Last year the cost of goods sold at GR was \$3,000,000. The average inventory in dollars was \$250,000. Calculate: a) The inventory turnover for GR b) The weeks of supply. Assume 52 weeks per year. c) The days of supply. Assume that GR operates 5 days per week. 3. (Problem 6) Frederick’s Farm Factory (FFF) currently maintains an average inventory valued at \$3,400,000. The company estimates its capital cost at 10%, its storage cost at 4.5%, and its risk cost at 6%. Calculate: a) The new annual holding cost rate. b) The total annual holding costs for FFF.

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4. (Problem 9) Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for \$12 each and are ordered in quantities of 1,300 units. Annual demand is 5,200 heat sinks, the annual inventory holding cost rate is \$3 per unit, and the cost to place an order is estimated to be \$50. Calculate the following: a) Average inventory level b) The number of orders placed per year c) The total annual inventory holding cost d) The total annual ordering cost e) The total annual cost 5. (Problem 11) Bill Maze, recently hired by Custom Computers, Inc., has suggested using the Economic Order Quantity for the heat sinks. Using the information from problem 1, calculate the following: a) Economic order quantity b) Average inventory level c) The number of orders placed per year d) The total annual ordering cost e) The total annual holding cost f) The total annual cost
6. (Problem 12) A local nursery, Greens, uses 1,560 bags of plant food annually. Green works 52 weeks per year. It costs \$10 to place an order for plant food. The annual holding cost rate is \$5 per bag. Lead time is one week. a)

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This note was uploaded on 10/17/2011 for the course MNGT 368 taught by Professor Curthurds during the Spring '08 term at Nicholls State.

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Chapter 12 Book Problems - Chapter 12 Book Problems...

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