BUSI 411 Homework 13 Inventory Management Assignment solutions complete answers
A produce distributor uses 780 packing crates a month, which it purchases at a cost of $8 each. The manager has assigned an annual carrying cost of 40 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month.
How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places.)
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 270 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 291 days a year.
a. Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
b. Find the number of runs per year. (Round your answer to the nearest whole number.)
c. Find the length (in days) of a run. (Round your answer to the nearest whole number.)
A company that produces hair dryers buys some of the components, but it makes the heating element, which it can produce at the rate of 860 per day. Hair dryers are assembled daily, 251 days a year, at a rate of 330 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,300 units.
a. Approximately how many batches of heating elements are produced annually? (Round your answer to 2 decimal places.)
b. If production on a batch begins when there is no inventory of heating elements on hand, how much inventory will be on hand 2 days later?
c.What is the average inventory of elements, assuming each production cycle begins when there are none on hand? (Do not round intermediate calculations. Round your answer to the nearest whole number.)
d. The same equipment that is used to make the heating elements could also be used to make a component for another of the firm’s products. That job would require 3 days, including setup. Setup time for making a batch of the heating elements is a half day. Is there enough time to do this job between production of batches of heating elements?
