Average inventory level for this optimum production quantity

Assignment Help Operation Management

Reference no: EM132123577

Ventura Lumber Mill (not a real company) in Salvador, Brazil, processes 9,000 logs annually and operates 300 days during a year. Ventura’s supplier delivers orders to the lumber mill at the rate of 50 logs per day. The cost to Ventura for placing an order to the supplier is US$1,400 per order, and the cost of carrying inventory of logs is US$20 per log per year: a. What is the economic production quantity (EPQ)? b. What is the average inventory level for this optimum production quantity? c. How many production setups would there be in a year? p.595 d. What is the optimal length of production run in days? e. What would be the savings in annual inventory cost if the holding costs can be reduced to US$18 per log per year?

Reference no: EM132123577

Questions Cloud

Does casey project team have a role in the decision : The Board of Directors has voted to add a new product line. Casey's department will be directly responsible for implementing the changes.

Workplace trends affecting the role of human resources : What are the most important societal and workplace trends affecting the role of human resources currently?

Aligning people with the requirement of new strategy : The author sees removal and replacement as a key element of aligning people with the requirement of a new strategy.

When are warranty contracts considered separately priced : Identify the accounting literature that addresses the accounting for the type of separately priced warranty that Pleasant is considering.

Average inventory level for this optimum production quantity : What is the economic production quantity (EPQ)? What is the average inventory level for this optimum production quantity?

Determine an ethical issue that is involved in the case : When the FASB issues new standards, the implementation date is often 12 months from date of issuance, and early implementation is encouraged.

List and discuss five shortcoming : List and discuss five shortcoming (characteristic or personality) that you may have which hinder you from becoming an effective leader.

Create a simple household budget : Create a simple household budget, including all income and expenses. There are various templates available online to help you do this.

Discuss major differences that can be overcome : Discuss major differences that can be overcome and those that are more difficult to overcome.

User Account

All Pages