1. Custom computers, Inc. assembles custom home computer systems. The heat sinks needed are bought from $12 each and are ordered in quantitiers of 1,300 units. Annual demand is 5,200 heat sinks, the annual inventory holding cost rate is $3 per unit, and the cost to place an order is estimated to be $50. Calculate the following:
a. Average inventory level:
b. Number of orders placed per year:
c. Total annual inventory holding cost:
d. Total annual ordering cost:
e. Total annual cost:
2. Bill Maze, recently hired by Custom Computers, Inc. has suggested using the economic order quantity for the heat sinks. From problem 9:
Unit purchase price (p): $12 Annual demand (D): 5,200 units
Order quantity (Q): 1,300 units Annual unit holding cost: $3.00
Order cost: $50.00
Using the information in Problem 9, calculate the following:
a. Economic order quantity (EOQ):
b. Average inventory level:
c. Number of orders placed per year:
d. Total annual ordering cost:
e. Total annual holding cost:
f. Total annual cost:
3-. A local nursery, Greens, uses 1,560 bags of plant food annually. Greens works 52 weeks per year. It costs $10 to place an order for plant food. The annual holding cost rate is $5 per bag. Lead time is 1 week.
a. Calculate the economic order quantity
b. Calculate the total annual costs
c. Determine the reorder point: