The annual demand for a popular item stocked by the fair, Ask an Expert

Management Studies

The annual demand for a popular item stocked by the Fair Deal Department Store is 600 units. The purchase cost per item is $20.00; and the cost of processing a purchase order is $12.00. The annual holding cost per unit of inventory is 20% of the purchase cost per unit. The Store Manager has set a stockout policy of less than or equal to 5%. The demand during leadtime is assumed to be uniform between the range spanning 30 to 70 units. That is, the probability of demand during leadtime for 30, 31, … ,70 units is 1 / 41.

a) Calculate the EOQ.

b) Calculate the reorder point, R.

c) Calculate the safety stock.

d) If the Order Size is increase to 80 or more units, the unit purchase cost will be reduced to $19.00. Calculate the EOQ for this Quantity Discount.

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91880968

Have any Question?Write your Review or question?

Related Questions in Operation Management

Designing the distribution network for michaelrsquos

Designing the Distribution Network for Michael’s Hardware Ellen Lin, vice president of supply chain at Michael’s Hardware, was looking at the financial results from the past quarter and thought that the company could sig ...

Corporate financea please provide the following core

Corporate Finance A. Please provide the following core business information and characteristics on Duke Energy Corporation: 1. The company name and ticker symbol. 2. Provide a brief description of this company and the ty ...

Effective management is key to an organizations success but

Effective management is key to an organization's success. But strong leadership is important too. Many people debate the use of these words interchangeably. Are all managers leaders? Are all leaders managers? What do you ...

The examiner rejects claim 1 of your patent application on

The examiner rejects Claim 1 of your patent application on a 103(b) basis. Claim 1 has two 9 components: A and B that combine to perform function X. The examiner points to a component S similar to A in patent Q that perf ...

1 what marketing issues must hq decidemarketing strategy

1. What marketing issues must HQ decide Marketing strategy – HQ promotes cross-fertilization among countries Product positioning – HQ persuasion for standardization Product characteristics – No initiative Branding – HQ e ...

Amy march entered into a three-year employment contract

Amy March entered into a three-year employment contract with Plumfield, LLC. Plumfield was in business for only a brief time, during which it incurred considerable losses. In terminating operations, which ceased before t ...

A knotty problemnice wood products is a small but

A knotty problem Nice Wood Products is a small but successful Pacific Coast firm that produces standard types and grades of lumber for the domestic construction industry. This includes 2x4s and 2x6s used in framing as we ...

Format to followintroductiondefinitionsshow

Format to follow Introduction definitions, show understanding give examples to illustrate your answer - MENA region /business/ is higher level explain conclude cite sources if quoted - but not essential approx 250 words ...

1 which theory says that employee motivation will remain

1) Which theory says that employee motivation will remain high when employees believe that a particular level of effort on their part will lead to a desired level of performance, and that level of performance leads to an ...

1 should a person anticipate ethical challenges as heshe go

1. Should a person anticipate ethical challenges as he/she go forward in his/her career? why? 2. Relates to emotional wellness, how Aerobic exercise positively impact you now and the future? 3. What Corporate and busines ...

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

Recent Questions

Ask Operation Management Expert