1. L. Houts Plastics is a large manufacturer of injection- molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below.
How would the plant classify these items according to an ABC classification system?
L. Houts Plastics' Charlotte Inventory Levels
|
Item Code #
|
Average Inventory(units)
|
Value($/unit)
|
|
1289
|
400
|
3.75
|
|
2347
|
300
|
4.00
|
|
2346
|
120
|
2.50
|
|
2363
|
75
|
1.50
|
|
2394
|
60
|
1.75
|
|
2395
|
30
|
2.00
|
|
6782
|
20
|
1.15
|
|
7844
|
12
|
2.05
|
|
8210
|
8
|
1.80
|
|
8310
|
7
|
2.00
|
|
9111
|
6
|
3.00
|
2. William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D = 19,500 units>year Ordering cost S = $25>order Holding cost H = $4>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?
3. Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units.
Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 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
4. Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2 per item per year, and ordering (setup) costs are $30 per order.
a) What is the economic production quantity?
b) How many production runs per year will be made?
c) What will be the maximum inventory level?
d) What percentage of time will the facility be producing components?
e) What is the annual cost of ordering and holding inventory?
5. Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level.
a) What safety stock level do you recommend for BX-5?
b) What is the appropriate reorder point?
6. You have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have been sub- mitted by three suppliers: Thailand Polishing, India Shine, and Sacramento Glow. Thailand Polishing has submitted a bid of 2,000 baht. India Shine has submitted a bid of 2,000 rupees.
Sacramento Glow has submitted a bid of $200. You check with your local bank and find that $1 = 10 baht and $1 = 8 rupees. Which company should you choose?