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# Module 5 Homework Problems 1. Mason Mfg Inc. ( see table below) wishes to compare its inventory turnover to those of industry leaders, who have

OM question
Module 5 Homework Problems 1. Mason Mfg Inc. ( see table below) wishes to compare its inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory. a) What is Mason’s inventory turnover? b) What is Mason’s percent of assets committed to inventory? c) How does Mason’s performance compare to the industry leaders? Mason Mfg, Inc Data Net revenue \$27,000 Cost of sales \$20,500 Inventory \$1,200 Total assets \$17,600 2. Jennie Lee Plastics is a large manufacturer of injection-molded plastics in Connecticut. An investigation of the company’s manufacturing facility in Hartford yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? ITEM Code # Average Inventory (units) Value (\$/unit) 1290 410 3.80 2348 290 4.05 2350 110 2.45 2364 70 1.55 2399 65 1.80 2400 25 1.95 2876 25 1.10 4487 13 2.10 1082 7 1.75 8322 6 2.05 9123 7 3.05 3. Peter Griffin’s computer training school, in Pawtucket, stocks workbooks with the following characteristics: Demand D = 19,200 units/year Ordering Cost S = \$30/order Holding Cost H = \$5/unit/year a) Calculate the EOQ for the workbooks. b) What are the annual holding costs for the workbooks? c) What are the annual ordering costs?
4. Verizon stocks a certain phone at its central warehouse for supplying field service offices. The yearly demand for these phones is 14,000 units. Verizon estimates its annual holding cost for this item to be \$ 20 per unit. The cost to place and process an order from the supplier is \$ 65. The company operates 300 days per year, and the lead time to receive an order from the supplier is 3 working days. a) Find the economic order quantity. b) Find the annual holding costs. c) Find the annual ordering costs. d) What is the reorder point?

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