1.
)
A.) What is the optimal Order Quantity?
Q=
√ 2 DS
H
=
√ 2( 8,000)( 30)
3
=
√ 480,000
3
= √ 160,000 = 400 Units
B.) The expected no. of order places each year.
P 8,000
N= = = 20 orders
Q 4,000
Number of working days 200
C.) Time between orders = T = = = 10 Working days
N 20
With 20 orders placed each year, an order for 400 transistors is placed every 10 working days.
2.)
1. 10000/300 x 5 = 167 units
2. The inventory should not go beyond 167 units. When level of inventory goes beyond 167, the
company will not have enough inventory to meet daily sales demand of the customer which is
around 33 units per day. It means that company will be in a position of stock out. To avoid this
company must place an order for notebook binders, as it will take 5 days to arrive at the shop.
3.)
Q=
√ 2 PS
IP
(12-10)
Q6.00 =
√ 2(5,000)(25)
( 0.25)(6.00)
= 408.25 or 408 Boxes
D Q
TC = S + = IP + PD (12-9)
Q 2
5,000 395
TC395 = ($25) + (0.25)($6.40) + $6.40(5,000) = $316 + $316 + $32,000 = $32,632
395 2
5,000 3,000
TC3,000 = (25) + (0.25)(6.00) + 6.00(5,000) =42 + 2,250 + 30,000 = 32,292
3,000 2
4.)
Inventory 7,000 Working Days
A 10% 20
B 35% 60
C 55% 120
Solution for the Data A, B, and C
A.) 0.10 x 7,000 = 700
B.) 0.35 x 7,000 = 2,450
C.) 0.55 x 7,000 = 3,850
A. Item per day = 35
B. Item per day =41
C. Item per day = 32
Total = 108
Item to be counted everyday: 700/20+2,450/60+3850/120 = 107.91 or 108
5.)
This exercise contains only parts a, b, and c.
A.) What is the economic order quantity for each supplier?
For Vendor 1 at $17.00/pound, the economic order quantity is 324 units (round your response to
the nearest whole number).
For Vendor 2 at $17.10/pound, the economic order quantity is 323 units (round your response to
the nearest whole number).
B.) What quantity should be ordered and which supplier should be used?
Therefore, the best option is to place the order with Vendor 2 for an order size of 1,200 units.
C.) What is the total cost for the most economic order size?
The total cost for the most economic order size is $166121 (round your response to the nearest
whole number).
