Determine the total annual inventory cost

Assignment Help Operation Management
Reference no: EM132245527

Ayo is the Purchasing Officer for a company that assembles desktop computers. The computers come with 4 to 6 USB ports. The annual demand for the computers is 600 units. The cost of each computer is $1700, and the inventory carrying cost is estimated to be 10% of the cost of each computer. Ayo has made a study of the costs involved in placing an order and has concluded that the average ordering cost is $50.00 per order. In addition, it takes 5 days for an order to arrive from the supplier.

Determine:

a. The Optimal Order Quantity

b. The reorder point

c. The Total Annual Inventory Cost

d. The optimal number of orders per year

e. The optimal number of days between orders, assuming there are 250 working days in the year.

Reference no: EM132245527

Questions Cloud

South africa is emerging as profitable production : South Africa is emerging as a profitable production and export base for some of the world’s big auto manufacturers,
Warkworth furniture specializes in environmentally friendly : Warkworth Furniture specializes in environmentally friendly and sustainable furniture.
Explain the quantitative strategic planning matrix : Diagram and explain the Quantitative Strategic Planning Matrix. Describe the positive features and limitations of this analytic tool.
Identifies missed supplier evaluation site components : Correctly identifies missed supplier evaluation site components and; correctly details
Determine the total annual inventory cost : Ayo is the Purchasing Officer for a company that assembles desktop computers. Determine the Optimal Order Quantity. The Total Annual Inventory Cost
What value of ordering cost would this order size be optimal : The assumptions of the EOQ are thought to apply. For what value of ordering cost would this order size be optimal?
Liability for violation of digital millennium copyright act : If you are allowing file sharing on this game, does this open you up to liability for violation of the digital Millennium Copyright Act?
To be lean means and to be agile means : To be lean means? To be agile means? Lean has its roots in
Promotional tools and brand loyalty : Which promotional tool is most effective in gaining your loyalty over time for a product?

Reviews

Write a Review

Operation Management Questions & Answers

  Takeovers often motivate companies to fire disabled workers

Bankruptcies and takeovers often motivate companies to fire disabled workers.

  What is employee involvement

What is employee involvement? What are some of the benefits of involving employees in the organization?

  Rapidly growing business

You have taken a position as half-time L&D/half-time HR professional in small but rapidly growing business. The previous incumbent filled out forms, filled them, and taught an orientation class for new employees. You want to align these departments w..

  Defined initial requirements-constant changes in scope

Some common symptoms of a failing project are ill-defined initial requirements, constant changes in scope,

  Categories of costs involved in their business process

Financial reports of different firms vary according to the dissimilar categories of costs involved in their business process.

  Change of value regarding human resources

When you answered you have to have with In-text citations and a reference list is always in the learning activities! The change of value regarding human resources to the organization coupled with technology is shifting the design of organizations tow..

  Motorcycle of your dreams

You are looking to buy a motorcycle, despite your spouse’s strong objections. There you see the motorcycle of your dreams.

  Government regulation of business

Present arguments for and against Food and Drug Administration (FDA) role in the regulation of business.

  What is the cumulative lead time for end item

Based on the BOM shown below, how many units of part F will be needed if 15 units of end item A are needed? If the company decided to purchase part D.

  Client production facility

While you were at client’s production facility, you noticed that factory personnel were taking hazardous chemicals-dumping them in forest area behind facility.

  Describe google international strategy

Analyse Google’s corporate portfolio and point out the strengths and weaknesses in its portfolio. Describe Google’s international strategy. What are the advantages and disadvantages associated with this strategy? What recommendations would you make t..

  Explain the important characteristics of risk management

You are a procurement manager for a company that manufactures and assembles construction equipment. Your supervisor has asked you to develop a new strategy for risk management and procurement management that will offer a competitive advantage in the ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd