JBooi HomeworkII QM

# JBooi HomeworkII QM - QM 670 Inventory Homework Jason Booi...

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QM 670 Inventory Homework: Jason Booi Question 2: (p.227) Order Quantity (Q) = \$100 Total Inventory Cost (IC) = Annual Ordering Cost + Annual Holding Cost Economic Order Quantity (EOC) = √(2DS/H) Order Cost (S) = \$10 per order IC= (D/Q)*S + (Q/2)*H EOC = √(2DS/H) Holding Cost (H) = \$0.25 per box per year Annual Demand (D)= 2,000 bars per year IC = (2000/100)*10 + (100/2)*0.25 IC = 200 + 12.5 IC = \$212.50 EOC = √((2*2000*10)/0.25)) IC = (2000/400)*10 + (400/2)*0.25 EOC = √ 160000 IC = 50 + 50 EOC = 400 IC = \$100.00 Number of Order per Year (NOY)= D/Q NOY (for EOQ) = D/Q NOY = 2,000/100 NOY (for EOQ) = 2000/400 NOY = 20 NOY = 5 Not required by the professor. The current order quantity for Electric Powerbars is 100 bars . The order cost is \$10 per order, the holding cost is \$0.25 per box per year, and the annual demand is 2000 bars per year a) Calculate the annual holding cost plus the annual ordering cost to get the total annual cost when using an order quantity of 100 bars. b) Calculate the EOQ and the total annual cost for this order quantity c) How many orders per year are necessary when Q = 100 ? How many orders per year are necessary for the EOQ in part b? d) Graph the annual inventory cost (IC) using Ms Excel. Show the holding cost, ordering cost, and total inventory cost as a function of order size Q.

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QM 670 Inventory Homework: Jason Booi Question 4: (p.228) Annual Demand (D) = 250 boxes of 200 per year Order Cost (S) = \$11 Holding Cost (H) = \$5 EOQ = √(2DS/H) EOQ = √[(2*250*11)/5] EOQ = 33.166248 EOQ = 33 (rounded) 4.8076923 per week TBO = 6.89858 TBO = 7 (rounded) IC (EOQ) = (D/Q)*S + (Q/2)*H IC (EOQ) = (250/33.1662 * \$11) + (33.1662/2 * \$5) IC (EOQ) = 82.91561977 + 82.91561977 IC (EOQ) = \$165.83 IC (15) = ([250/15] * 11) + ([15/2] * \$5) IC (15) = \$220.83 Burgerama requires all employees who handle food to wear latex gloves for sanitary reasons. The annual demand for gloves is 250 boxes of 200 per year. The order cost is \$11 per order, and the carrying cost is 25 percent per box per year of the purchase cost of \$20 per box. a)
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JBooi HomeworkII QM - QM 670 Inventory Homework Jason Booi...

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