HW8 (blank)

# HW8 (blank) - b) Calculate Total Cost c) Describe inventory...

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Brittany Braud Management 368 Homework 8 June 22, 2011 1. Chapter 12 – 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) Calculate EOQ b) Calculate Total Annual Cost c) Calculate Reorder Point d) Describe the inventory policy 2. Chapter 12 – Problem 14: In an effort to reduce its inventory, Rapid Grower is offering Greens, the local nursery (Problems 12 and 13), two additional price breaks to consider. If the nursery orders a three-month supply, the cost per bag is \$16. If Greens orders a six-month supply, the cost per bag is \$14.50. Should Greens change its order quantity calculated in Problem 13? a) Calculate EOQ at different price to see if a feasible solution can be found

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Unformatted text preview: b) Calculate Total Cost c) Describe inventory policy 3. Good Garden Company (GGC) produces a high-quality organic lawn food and weed eliminator called Super Green (SG). Super Green is sold in a 50-pound bag. Monthly demand for Super Green is 75,000 pounds. GGC has a capacity to produce 24,000 50-pound bags per year. The setup cost to produce Super Green is \$300. Annual holding cost is estimated to be \$3 per 50-pound bag. Currently, SG is producing in batches of 2,500 bags. a) Calculate the total annual costs of the current operating policy at GGC (hint: current Q=2,500 bags) b) Calculate the EPQ, total costs of the EPQ policy, describe the policy c) Calculate the penalty cost incurred with the present policy...
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## HW8 (blank) - b) Calculate Total Cost c) Describe inventory...

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