Estimate the annual carrying cost per item

Assignment Help Supply Chain Management

Reference no: EM13222466

Problem 1:

You have gathered the following information for a friend who manages a restaurant. You will use this data for an ABC analysis and use it in the first 3 questions in the HW Form:

Item	Annual Demand (case)	$Value per case
Carrots	122	31
Chicken	488	325
Crab	44	175
Cream	256	33
Eggs	316	22
Fish	120	175
Flour	884	12
Garlic	66	5
Milk	988	30
Napkins	1500	16
Oil	104	28
Order pads	104	12
Pasta	416	23
Pepper	104	4
Potatoes	575	10
Salad mix	388	15
Salt	104	3
Seasoned Salt	52	4
Soup Stock	400	44
Steak	375	135
Sugar	146	7
Table Clothes	260	32
Tomato Sauce	260	23
Wine	764	250
Yeast	20	5

Problem 2:

You typically order the ink cartridge replacements for your office at 100 units at a time. You estimate that the annual carrying cost per item is 34% of the $55 unit cost. (The cost to hold one item for one year = 34% of the $55.) Annual demand is 500 units. You estimate that the cost to place an order is $25. Since you learned about the EOQ model in class, you want to compare your plan to order 100 units at a time with an EOQ solution. Assume that there are 365 working days a year and that lead time is 14 days. Consider only the inventory costs and answer questions 4 to 9 in the HW Form.

Problem 3:

You supply 300,000 small button batteries per year to Light-My-Way, Inc., manufacturer of LED dog collars. The setup cost is $50 and the holding cost is $0.04 per year per battery. You can produce 1500 batteries per day. You ship 750 per day to Light-My-Way, Inc. Questions 10 to 12 in the HW Form use this information.

Problem 4:

You purchase key chains with your company logo to give to customers. You purchase 10,000 a year. You estimate the cost to hold at 30% of the purchase cost and the cost to place an order at $25 per order. Your vender gives you the following pricing information.

Order Quantity	Unit Price
Less than 1500	$2.50
1500 to 4,999	$2.30
5000 or more	$2.25

Reference no: EM13222466

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