Reference no: EM131448967
Question: 1. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year
What is the EOQ for the component?
2. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year
What is the average flow time (days)?
3. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year
What is the total annual holding and ordering costs associated with your recommended EOQ?
4. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year
What is the total cost associated with this recommended EOQ?
5. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year
Suppose that Westside's management likes the operational efficiency of ordering once a month in quantities of 1000. How much more expensive would this policy be?
6. Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier.
Westside's generator production operation (which operates at a constant rate) will require 1000 components per month. Assume that ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per years
Would you recommend this change? (yes or no)