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Devry BSOP330 week 4 ilab

12.1 L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company’s manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system?
L. Houts Plastics Charlotte Inventory Levels
Item Code # Average Inventory (units) Value ($/unit)
1289 400 3.75
2347 300 4.00
2349 120 2.50
2363 75 1.50
2394 60 1.75
2395 30 2.00
6782 20 1.15
7844 12 2.05
8210 8 1.80
8310 7 2.00
9111 6 3.00

•12.5 William Beville’s computer training school, in Richmond, stocks workbooks with the following characteristics:
Demand D = 19,500 units/year
Ordering cost S = $25/order
Holding cost H = $4/unit/year
a) Calculate the EOQ for the workbooks.
b) What are the annual holding costs for the workbooks?
c) What are the annual ordering costs?

•12.9 Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days.
a) Find the economic order quantity.
b) Find the annual holding costs.
c) Find the annual ordering costs.
d) What is the reorder point?

12.12 Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas’s fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is a corporate operation, and there are 250 working days per year.)
a) What is the EOQ?
b) What is the average inventory if the EOQ is used?
c) What is the optimal number of orders per year?
d) What is the optimal number of days in between any two orders?
e) What is the annual cost of ordering and holding inventory?
f) What is the total annual inventory cost, including cost of the 6,000 units?

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