Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Homework Help/Study Tips Expert

1. Demand for Stick disposable razors at Buyright Drugs averages seven packages per day. The razors cost Buyright $0.80 per package and sell for $1.49. Buyright uses a 20% annual holding cost rate and estimates the cost to place an order for additional razors at $25. Buyright is open 365 days a year, has an average demand of 10 packages per day, and desire a safetystock of 25 packages. The lead time for delivery is five days. Determine the following:

a. The optimal inventory policy (order quantity and reorder point) for Stick razors.

b. The number of days between orders (cycle time).

c. The total annual inventory cost (holding, ordering, and procurement) and the projected annual net profit of this policy.

2.Bee's Candy manufactures a variety of candy bars in a number of different sizes. One of its more popular products is the three-ounce Smirk bar. Bee's forecasts that demand for this product should be fairly constant over the next year, totaling 21 million bars.

The candy production line, which operates 24 hours a day, 365 days a year, is capable of producing three candy bars per second and per unit cost is $1.00. A production setup for the three-ounce Smirk bar takes 50 minutes and costs approximately $450. The annual holding cost of a three-ounce Smirk bar is estimated as $0.12.

a. What is the optimal production batch size and the length of a production run in hours (including setup time)?

b. What is the total annual inventory holding and production setup cost for this policy?

c. What is the number of days between the start times of successive production runs?

d. How would your answers to part (a) change if the annual holding cost decreased to $0.10 per bar?

3. Jackson Mint produces collectible plates. It has recently contracted with the estate of well-known artist, Skip Gunther, to produce a series of five commemorative plates bearing copies of the artist's most famous pictures. The plates will be sold by subscription at a cost of $300 plus shipping and handling for the entire five-plate series. Jackson estimates the cost of producing each plate in the series at $12.50 plus a $9.75 royalty that Jackson has agreed to pay the Gunther estate.

Jackson intends to mount a $175,000 nationwide advertising campaign promoting these plates as a "limited edition"; that is, Jackson "'ill specify the number of plates it will produce and limit production to that amount. Any unsold plates will be destroyed. Based on its previous experience with such products, Jackson estimates that customer demand for the series will be approximately normally distributed, with a mean of 1800 and a standard deviation of 250.

If Jackson has more subscribers than plate it will refund subscribers' money with a note explaining that the series has been over subscribed. Reasoning that the unsatisfied customers will be more willing to subscribe to Jackson's future offerings, it estimates that each unsatisfied customer will earn the company an average of $40 in discounted future profits.

a. What is the optimal number of Skip Gunther series Jackson should produce?

b. What expected profit or loss will Jackson earn if it follows the production policy found in part (a)?

4. Clark Equipment distributes the Clanton Model 406 bread slicer used in bakeries. The slicers cost $250 each, and Clark sells them to net $310 after marketing and related expenses. The company estimates that the annual demand for this product is 450 units. The policy at Clark has been never to allow stockouts intentionally, and the company has carried a safety stock of 30 units in order to protect against such occurrences. Because of mounting fiscal pressure, however, Clark is considering eliminating the safety stock for the bread slicers and adopting a policy that allows for stockouts.

Clark estimates that it will suffer a customer goodwill loss of $25 per week for each week a customer must wait for a back ordered bread slicer. Clark also believes that there is an administrative cost of $30 in handling a backorder and that adopting such a policy would result in a 4% decrease in annual sales of the bread slicer. Clark uses a 15% annual inventory holding cost rate, and the cost of ordering slicers from Clanton is $180. Delivery lead time is 10 working days, and Clark is open 250 days a year.

a. Determine the optimal order quantity, re-order point, and annual profit under the current policy of not intentionally allowing backorders.

b. Determine the optimal order quantity, reorder point, and annual profit if Clark intentionally allows for backorders.

c. What is your recommendation to management as to whether Clark should intentionally allow for backorders? Justify this recommendation.

Homework Help/Study Tips, Others

  • Category:- Homework Help/Study Tips
  • Reference No.:- M9788432

Have any Question?


Related Questions in Homework Help/Study Tips

Please number each questions1 how is the most successful

PLEASE NUMBER EACH QUESTIONS 1. How is the most successful insider fraud perpetrated? Give at least two specific examples. Your response should be a minimum of 225 words. 2. What is the Tor Network? Explain its threats. ...

Pretend that you are a child development consultant whose

Pretend that you are a child development consultant whose client wants to have the most stimulating and encouraging nursery possible. The client wants to know how to arrange the nursery, what type of furniture and baby g ...

Question you have been given the following specifications

Question: You have been given the following specifications of a simple database for keeping track of exercise sessions and their instructors at a fitness centre (note that primary keys are shown underlined, foreign keys ...

1 motivationanalyze the value of motivation give an

1. Motivation Analyze the value of motivation. give an exxplanation of a professional experience where your degree of motivation impacted the outcomes of the situation. Recommend strategies as a health care administrator ...

Question formatting mla style 12 pt times new roman double

Question: Formatting: MLA style: 12 pt. Times New Roman, double spaced, proper heading on left side, last name and page number on right side Overview: Show the similarities and differences between two things. Should have ...

Review the website airmail service from the smithsonian

Review the website Airmail Service from the Smithsonian National Postal Museum that is dedicated to the history of the U.S. Air Mail Service. Go to the Airmail in America link and explore the additional tabs along the le ...

Short answers questions1- what are the effects of race and

Short answers questions: 1- What are the effects of Race and class in shaping a child's personality? 2- Does Macionis claim that watching TV -(remember media is the 4th agent of socialization)- is harmful for children? e ...

The value of small-group theoriesin this assignment you

The Value of Small-Group Theories In this assignment, you will explore the dynamics of the small-group theory. You will learn the competing views of the small-group theory, understand the similarities and differences wit ...

Who was the most interesting philosopher during the

Who was the most interesting philosopher during the renaissance and What were his commitment and challenge to the birth of science?

Question what is the johnson amendment explain its history

Question : What is the "Johnson Amendment?" Explain its history, as well as the arguments pro and con regarding it. What has President Trump said and done about the amendment? What is its legal status now? Be specific in ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As