# PROBLEM 3 Cost of each repair component: 20 € Holding cost: 45 €/un. and year

David has just obtained his degree in Business Administration and has been hired by Sony in his Operations Department. The first assigned task is to manage one of the components that the company sales as repair component for its TV. The Oper-ations manager wishes to know the number of days between placing two orders to this particular provider. For this, the company has the following information:

Cost of placing an order: 300 €

Planning horizon: 300 days

Daily consumption rate: 1.000 units

David, remembering the Operations Management class he took at the university, thinks that it would also be interesting to calculate the total inventory cost per peri-od, as well as the number of components that must be ordered each time. For this calculation he found out that the lead time is two weeks.

NOTE: Use the Fixed-period model.

**PROBLEM 4 **

**CONSPLA Ltd**. is a family business that produces plastic components for toys. In order to produce each of those components, they need one plastic loop that is bought to a provider for 10 € the unit. These loops are stored until needed in the production process, with a cost of 720 € per unit and year. The company incurs a cost of 15 € every time an order is placed and the order takes 2 days to arrive to **CONSPLA Ltd. **since the order is placed.

For a total demand of 3600 loops and a planning horizon of 360 days, please de-termine:

**A) Using the EOQ Model: **

1) The Order Size that minimizes the inventory cost for the loop.

2) Total cost per loop.

3) Number of orders that must be placed by the company in the planning horizon.

**B) Using the Fixed-Period Model: **

1) The optimal time between orders.

2) The Order Size.

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