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
|