CH 13

Garden Variety Flower Shop uses 690 clay pots a month. The pots are purchased at $2.30 each. Annual carying costs per pot are estimated to be 20% of cost, and ordering costs are $15 per order. The manager has been using an order size of 1,750 flower pots. What is the difference in total cost between the current Order Quantity and the Economic Order Quantity?

$135.45

A produce distributor uses 760 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35% 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?

$329

A chemical firm produces sodium bisulfate in 100 pound bags. Demand for this product is 25 tons per day. the capacity for producing the product is 50 tons per day. Set up costs $100, and storage and handling costs are $8 per ton a year. The firm operates 200 days a year (Note: 1 ton = 2,000 pounds How much could the company save annually if the setup cost could be reduced to $33 per run?

$851

A bakery buys flour in 25 pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. Compute the total cost of ordering and carrying flour using EOQ as demand.

1,350

A chemical firm produces sodium bisulfate in 100 pound bags. Demand for this product is 25 tons per day. the capacity for producing the product is 50 tons per day. Set up costs $100, and storage and handling costs are $8 per ton a year. The firm operates 200 days a year (Note: 1 ton = 2,000 pounds About how many runs per year would there be? D/Q

10

A chemical firm produces sodium bisulfate in 100 pound bags. Demand for this product is 25 tons per day. the capacity for producing the product is 50 tons per day. Set up costs $100, and storage and handling costs are $8 per ton a year. The firm operates 200 days a year (Note: 1 ton = 2,000 pounds Determine the approximate length of a production run, in days. EOQ/p

10

A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and its cost approximate $60 to order and receive a shipment of paper. Find "D"

10,400 packages

A chemical firm produces sodium bisulfate in 100 pound bags. Demand for this product is 25 tons per day. the capacity for producing the product is 50 tons per day. Set up costs $100, and storage and handling costs are $8 per ton a year. The firm operates 200 days a year (Note: 1 ton = 2,000 pounds) What would the average inventory be for this lot size? EOQ/p*(p-u)/2

125

A bakery buys flour in 25 pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. Determine the economic order quantity.

18

Find the EOQ given this information: d = 4,500 units/year s = $36 h = $10 per unit per year

180 units

A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and its cost approximate $60 to order and receive a shipment of paper. What order size would minimize the sum of annual ordering and carrying costs? =EOQ

204 boxes

A company manufactures hair dryers. It buys some of the components, but it makes the heating element, which it can produce at the rate of 800 per day. hair dryers are assembled daily, 250 days a year, at a rate of 300 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,000 units. a. approximately how many batches of heating elements are produced annually?

37.5

A chemical firm produces sodium bisulfate in 100 pound bags. Demand for this product is 25 tons per day. the capacity for producing the product is 50 tons per day. Set up costs $100, and storage and handling costs are $8 per ton a year. The firm operates 200 days a year (Note: 1 ton = 2,000 pounds) How many bags per run are optimal?

500

A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and its cost approximate $60 to order and receive a shipment of paper. Compute the total annual cost using your order size from part a

6,118.52

Find the Economic Production Quantity (EPQ) given this information: d = 4,500 units/year s = $36 h = $10 per unit per year

600 units

A bakery buys flour in 25 pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. How many orders per year will there be?

68

Garden Variety Flower Shop uses 690 clay pots a month. The pots are purchased at $2.30 each. Annual carying costs per pot are estimated to be 20% of cost, and ordering costs are $15 per order. The manager has been using an order size of 1,750 flower pots. What is the Economic Order Quantity?

735 units

A bakery buys flour in 25 pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. What is the average number of bags on hand?

9