QUIZ+2+2012+ACTUAL+SOLUTIONS

J j n k a kmny jkm 1 m k k 3

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Y jkm ! X k e) Formulate the constraint that stipulates that for every product j ! J and every period or week, the inventory needs are met. #j ! J ; n ! K " " a kmnY jkm = 1 m k !K 3 of 8 pages IOE 491, Service Operations Management Winter, 2012, IOE Dept, U. Michigan Name Place your name on all pages now! Problem 2: A particular Sears store expects to sell 600 room air Month Demand conditioners (or a particular model and manufacturer) per January 13 year. However, the sales are highly seasonal as shown in the February 20 table to the right. March 32 Also, suppose that the holding cost per air conditioner is $2 April 48 per month. The fixed cost of placing an order is $500. May 85 June 120 a) Suppose we place an order at the beginning of July 90 January to cover demand for the first three months of August 70 the year – January, February and March. What is the September 42 fixed plus inventory holding cost for such an order? October 35 November 29 3 5$ !1 500 + 2 " 13 + 20 + 32 % = 733 December 16 2 2& #2 Total 600 b) The table below (see next page) gives 12 values of the total annual cost (the total fixed order cost plus the holding cost) when the holding cost per item per month is $2.00. If the fixed cost per order is $500, i. How many times per year should the company be ordering? Based on the table below, you order 4 times per year and the holding cost is 1644. The fixed cost is $2,000 so the total cost is $3,644. ii. What is the total annual cost when you order this often? $3,644 c) For what value of the fixed cost should the firm switch between ordering 2 times per year and 3 times per year? Based on the table below, the critical value is a fixed cost of $1,028. 4 of 8...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern