Exam 6: Inventory Control Models

Consider the material structure tree for item A below.Assume 15 units of A are needed. (a)How many units of B are needed? (b)How many units of C are needed? (c)How many units of D are needed? (d)How many units of E are needed?

What shows how many units are needed at every level of production?

Consider the material tree structure for material A.Assume 10 units are needed. (a)How many units of B are needed? (b)How many units of C are needed? (c)How many units of D are needed? (d)How many units of E are needed? (e)How many units of F are needed?

Jack Spratt is the production manager for a manufacturing firm that produces wizzy-gadgets and other items.The annual demand for a particular wizzy-gadget is 1,600 units.The holding cost is $2 per unit per year.The cost of setting up the production line is $25.There are 200 working days per year.The production rate for this product is 80 per day.If his maximum inventory level is 180 units,how many units did he produce each time he started production of the wizzy-gadgets?

The annual demand for a product is 1,000 units.The company orders 200 units each time an order is placed.The lead-time is 6 days,and the company has determined that 20 units should be held as a safety stock.There are 250 working days per year.What is the reorder point?

Candy Incorporated stocks bubble gum game cards,an item that has a normally distributed demand during the reorder period with a mean of 12 dozen boxes and a standard deviation of two dozen boxes.If it is desirable to experience a stockout only 10 percent of the time,what is the appropriate safety stock?

The H.A.L.Computer Store sells a printer for $200.Demand for this is constant during the year,and annual demand is forecasted to be 600 units.The holding cost is $20 per unit per year,while the cost of ordering is $60 per order.Currently,the company is ordering 12 times per year (50 units each time).There are 250 working days per year and the lead-time is 10 days. (a)Given the current policy of ordering 50 units at a time,what is the total of the annual ordering cost and the annual holding cost? (b)If the company used the absolute best inventory policy,what would the total of the ordering and holding cost be? (c)What is the reorder point?

Rose Arena is the production manager for a manufacturing firm that produces buggy whips and other items.The annual demand for a particular buggy whip is 1,600 units.The holding cost is $2 per unit per year.The cost of setting up the production line is $25.There are 200 working days per year.Rose decided to produce 200 units each time she started production of the buggy whips.If it took her 4 days to produce the 200 units,what was her production rate?

The purchasing manager for a firm is trying to determine what the safety stock should be for a particular product.She has developed the following table,which gives the distribution of demand during the lead-time and the probabilities: The carrying cost is $5 per unit per year,the ordering cost is $30 per order,and the stockout cost is $40 per unit.The reorder point is 60 units,and 6 orders are placed each year.What level of safety stock should be maintained?

The annual demand for a product has been projected at 2,000 units.This demand is assumed to be constant throughout the year.The ordering cost is $20 per order,and the holding cost is 20 percent of the purchase cost.The purchase cost is $40 per unit.There are 250 working days per year.Currently,the company is ordering 500 units each time an order is placed.Assuming the company uses a safety stock of 20 units resulting in a reorder point of 60 units,what is the expected lead-time for delivery?

List four significant inventory costs.

The annual demand for a product is 1,000 units.The company orders 200 units each time an order is placed.The lead-time is 6 days.There are 250 working days per year.If the reorder point is 50,what safety stock are they using?

With an annual demand of 2,400 units,daily demand of 10 units,and daily production rate of 40 units,a company has determined that each production run will be for 200 units.If production starts when the inventory level is at zero,how many units would actually be in the warehouse at the end of the first day of production? (Round your answer to the nearest unit. )

In the ABC analysis of inventory,the A group items

Which of the following is not a benefit of a well-developed ERP system?

Inventory is any stored resource that is used to satisfy a current or future need.

SAP,Oracle,and PeopleSoft are all examples of

Under the assumptions made to develop the EOQ model,average inventory is one-half of the maximum inventory.

A person is using the normal distribution to determine the safety stock for a product.The Z value of 1.65 would be associated with what service level?

The EOQ model without the instantaneous receipt assumption is commonly called the