Martha 166 inventory control models l chapter 6 wants

Martha
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CHAPTER 6
wants to classify the items according to the dollars invested in these. The following table
provides information about the 10 items that she carries:
Item Number Unit
Cost
Demand (units)
E102 4.00 800
D23 8.00 1,200
D27 3.00 700
R02 2.00 1,000
R19 8.00 2,000
S107 6.00 500
S123 1.00 1,200
U11 7.00 800
U23 1.00 1,500
V75 4.00 1,500
Use ABC analysis to classify these items into categories A, B, and C.
6.126 East Valve Distributors distributes industrial valves and control devices. The Eastern control
device has an annual demand of 9,375 units and sells for $100 per unit. The cost of ordering is
$40 per order. If the EOQ is calculated to be 1,000 units, what is the average carrying cost per
unit per year?
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6.127 We use 1,500 per year of a certain subassembly that has an annual holding cost of $45 per unit.
Each order placed costs us $150. We operate 300 days per year and have found that an order
must be placed with our supplier 6 working days before we can expect to receive that order.
What reorder point should we use?
6.128 Mark Barry forecasts annual demand his new computer software to be 6,250 units. This should
be relatively constant throughout the year. The cost of placing an order is $40, while the
holding cost per unit is $2 per unit per year. Lead time is constant at 4 days, and there are 250
working days per year. If lead time can be reduced to 2 days, what should the new EOQ be?
6.129 The H.A.L. Computer Store sells a printer for $200. Demand for this is constant during the
year, and annual demand is forecasted to be 600 units. The holding cost is $20 per unit per
year, while the cost of ordering is $60 per order. Currently, the company is ordering 12 times
per year (50 units each time) with a total annual ordering and holding cost of $1,400. There are
250 working days per year and the lead time is 10 days.
(a) Is the annual total order and holding cost more or less than the optimal?
(b) If the company decides to keep a safety stock equal to 5 units, what is the reorder point?
ANSWER: