Which approach would you recommend to westside auto

Assignment Help Other Subject

Reference no: EM131904062

Question: 1. Westside Auto purchases a component used in the manufacture of automobile generators directly from a supplier. Westside's generator production operation, which is operated at a constant rate, will require 1000 components per month throughout the year (12,000 total units annually). Assume that the ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of inventory. Westside has 250 working days per year and a lead time of 5 days. Now, suppose Westside Auto decides to operate with a backorder inventory policy. Backorder costs are estimated to be $5 per unit per year. Identify the following:

a) Minimum cost order quantity

b) Maximum number of backorders

c) Maximum inventory

d) Cycle time

e) Total annual cost

Which approach would you recommend to Westside Auto, using back orders or not? Why?

Reference no: EM131904062

Questions Cloud

Discuss about the cash budget and personal savings ratio : Your Cash Budget and Personal Savings Ratio box feature on page 100 of the text, we defined something called your personal savings ratio.

Explain the concept of time value of money : Explain the concept of the Time Value of Money (TVM). Based on the TVM, why is "money today" worth more than "money tomorrow"?

How does autoimmune disorder affect the immune system : Name one autoimmune disorder. How does it affect the immune system? Do you know someone who has an autoimmune disorder? How does it affect his or her life?

What is the best length of time to run a campaign : Create a presentation using the data that make clear recommendations on how people can create a successful Kick starter campaign

Which approach would you recommend to westside auto : Westside Auto purchases a component used in the manufacture of automobile generators directly from a supplier. Westside's generator production operation.

Identify the structures and functions of main organs found : Identify the structures and functions of the main organs found in your selected organism. Would their organ system still be as efficient? Why or why not?

Why do you think ivana behaves the way she does : ICS, Inc. Ivana is the owner of ICS, Inc. an information systems consulting firm of 20 employees. The company mostly designs and implements information.

The firm use to discount the project cash flows : What is firm’s market capital structure? what rate should the firm use to discount the project’s cash flows?

Find the selling price if the bond ytm remains constant : You sell the bond upon receiving that last coupon. Find the selling price if the bond's YTM remains constant.

User Account

All Pages