EL Computer produces its multimedia notebook computer on a production line that has anannual capacity of 16,000 units. EL Computer estimates the annual demand for this model a6000 units. The cost to set up the production line is $2345, and the annual holding cost is $30per unit. Current practice calls for production runs of 500 notebook computers each montha. What is the optimal production lot size?b. How many production runs should be made each year? What is the recommended cycletime?c. Would you recommend changing the current production lot size policy from themonthly 500-unit production runs? Why or why not? What is the projected savings ofyour recommendation?

A. The optimum production lot size can be decided through the usage of the Economic Order Quantity…

Answered: EL Computer produces its multimedia…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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6. The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $40.00. It costs $50.00 to place an order for SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume 250 working days in the year where SKU 005 is used. (Noteshaper: Scenario #26) а. What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005? b. How many of SKU 005 should be ordered, to minimize combined ordering and holding costs? c. The vendor who sells SKU 005 has just offered a 5% discount for orders of 500 or more. Now how many should be ordered? d. Once the purchasing manager for SKU 005 places an order, the vendor requires 7 working days to deliver that order. What should be the purchasing manager's reorder point?
The following information pertains to Emy Manufacturing Corporation's Product X: Annual demand 33,750 units Annual cost to hold one unit of inventory P15 Setup cost (or the cost to initiate a production run) P500 Beginning inventory of product X 0 At present, the Company produces 2,250 units of Product X per production runt for a total of 15 production runs per year. The company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X. If the EOQ model is used, the economic lot size is a.2,250 units. c. 2,250,000 units. b.1,500 units. d. P1,500.
Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How much would be Item X's total annual purchasing cost? * O Php 8,485 O Php 2,000,000 None of the above Php 16,971
Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. When should Item X be ordered? * Whenever Item X's inventory level drops to 50 units O Every 9 days Every 50 days 50 times a year How much would be Item X's total annual procurement cost? *
Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How many units of Item X should be ordered each time? * O 94 units 2,000 units O 95 units O 100 units
Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How much would be Item X's total annual procurement cost? * Php 2,000,000 O Php 16,971 Php 8,485 None of the above dba Itam V'n total annual ctockouit cost? *
K Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,300 flashing lights per year and has the capability of producing 100 per day Setting up the light production costs $48. The cost of each light is $1.05 The holding cost is $0.15 per light per year a) What is the optimal size of the production run? units (round your response to the nearest whole number).
Basic EOQ Model Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. When should Item X be ordered? * Whenever Item X's inventory level drops to 50 units O Every 9 days Every 50 days 50 times a year How much would be Item X's total annual procurement cost? *
Demand for portable music players for joggers has caused Nancy Industries (Nancy) to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nancy expects demand for music player to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demands for the players for last year was as follows : Month Demand (units) Jan 4200 Feb 4300 Mar 4000 Apr 4400 May 5000 Jun 4700 Jul 5300 Aug 4900 Sep 5400 Oct 5700 Nov 6300 Dec 6000 Question : From the choice of simple moving average, weighted moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate to Nancy Industries? Why?
Nestle Ltd. It produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.550 per bag. What is the optimal total cycle time including the production time in year? a. 0.108 b. 0.502 OC. None is correct d. 0.069 e. 0.721 f. 0.208
25) Liebert Company The Liebert company operates 320 days a year and has an annual demand of 40,000 components. It costs $1.50 to carry one component in inventory for one year. The cost per order is $300 and the Liebert company orders with the Basic EOQ model. What is the average inventory level? Group of answer choices a) 134 components b) 4,800 components c) 2,400 components d) 8,000 components e) 4,000 components f) 2,000 components
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of the assemblies, the XO-01, has an estimated annual demand of 11,000 units. The cost to place an order for these assemblies is $500, and the holding cost for each assembly unit is approximately $20 per year. The company has 320 workdays per year. What is the economic order quantity (EOQ) for the XO-01? (Round your answer to the nearest whole unit.) The EOQ is units. What is the annual inventory holding cost of the XO-01 if Talbot Co. uses the EOQ for orders? (Round your answer to the nearest cent, i.e., two decimal places.) The annual inventory holding cost is $ per year. If they use the EOQ for orders, what is the cycle length (time between orders) for the XO-01? (Round your answer to the nearest whole number of workdays.) The cycle length is workdays. Q MacBook Pro 5+ Time Remaining: 00:19:58 A + Next

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