# Martha 166 inventory control models l chapter 6 wants

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Martha
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Inventory Control ModelslCHAPTER 6wants to classify the items according to the dollars invested in these.The following tableprovides information about the 10 items that she carries:Item NumberUnitCostDemand (units)E1024.00800D238.001,200D273.00700R022.001,000R198.002,000S1076.00500S1231.001,200U117.00800U231.001,500V754.001,500Use ABC analysis to classify these items into categories A, B, andC.
6.126East Valve Distributors distributes industrial valves and control devices.The Eastern controldevice 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 perunit per year?
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Inventory Control ModelslCHAPTER 66.127We 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 ordermust be placed with our supplier 6 working days before we can expect to receive that order.What reorder point should we use?
6.128Mark Barry forecasts annual demand his new computer software to be 6,250 units.This shouldbe relatively constant throughout the year.The cost of placing an order is \$40, while theholding cost per unit is \$2 per unit per year.Lead time is constant at 4 days, and there are 250working days per year.If lead time can be reduced to 2 days, what should the new EOQ be?
6.129The H.A.L. Computer Store sells a printer for \$200.Demand for this is constant during theyear, and annual demand is forecasted to be 600 units.The holding cost is \$20 per unit peryear, while the cost of ordering is \$60 per order.Currently, the company is ordering 12 timesper year (50 units each time) with a total annual ordering and holding cost of \$1,400.There are250 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:

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