please show all work.Chapter 11 11.7 pg 431

TABLE 11.3 DOLLARS OF ADDITIONAL SALES NEEDED TO EQUAL $1 SAVED THROUGH THE SUPPLY CHAINPRECENT OF SALES SPENT IN THE SUPPLY CHAIN

30% 40% 50% 60% 70% 80%2 $2.78 $3.23 $3.85 $4.76 $6.25 $9.09 4 $2.70 $3.13 $3.70 $4.55 $5.88 $8.33 6 $2.63 $3.03 $3.57 $4.35 $5.56 $7.69 8 $2.56 $2.94 $3.45 $4.17 $5.26 $7.14

10 $2.50 $2.86 $3.33 $4.00 $5.00 $6.67

Using Table 11.3, determine the sales necessary to equal a dollar of savings oon purchases for a company that has:

a. A net profit of 6% and spends 60% of its revenue on purchases $4.35 (See table above)b. A net profit of 8% and spends 80% of its revenue on purchases. $7.14 (See table above)

12.1George Walker has complied the following table of six items in inventory along with the unit cost and the annualdemand in units

unit cost ($)XX1 $5.84 1,200 B66 $5.40 1,110

3CPO $1.12 896 33CP $74.54 1,104 R2D2 $2.00 1,100 RMS $2.08 961

Using ABC analysis, which item(s) should be carefully controlled using a quantitative inventory techniqueand which item(s) should not be closely controlled?

unit cost ($) RankXX1 $5.84 1,200 $7,008.00 6.97% 2B66 $5.40 1,110 $5,994.00 5.96% 3

3CPO $1.12 896 $1,003.52 1.00% 633CP $74.54 1,104 $82,292.16 81.89% 1R2D2 $2.00 1,100 $2,200.00 2.19% 4RMS $2.08 961 $1,998.88 1.99% 5

Total $100,496.56 100.00%

PRESENT NET PROFIT

OF FIRM

identification code

annual demand in units

identification code

annual demand in units

annual demand in $

% of Total $ Volume

Items 33CP XX1 B66 should be carefully controlled using a quantitative inventory techniqueItems R2D2 RMS 3CPO should not be closely controlled

12.5William Beville's computer training school, in Richmond, stsocks workbooks with the following characteristics:

a. Calculat the EOQ for the workbooksb. What are the annual holding costs for the workbooksc. What are the annual ordering costs

a. Calculat the EOQ for the workbooks

D= 19500 units/year Demand

S= $25 per order Ordering cost

H= $4 /unit/year holding cost

494 =√(2*19500*25/4)

Answer EOQ= 494

b. What are the annual holding costs for the workbooks

Annual holding cost= 1/2 * EOQ * H= $988 =(1/2)*494*4

Answer: Annual holding cost= $988

c. What are the annual ordering costs

No of orders=D/EOQ= 40 =19500/494Ordering Cost=S= $25Annual Ordering cost= $1,000 =40*25

Answer: Annual ordering cost= $1,000

Demand D = 19,500 units/yearOrdering cost S = $25/orderHolding cost H = $4/unit/year

EOQ=√(2 DS)/H=

Note: For EOQ Annual Holding cost and annual ordering cost should be equal. However because of rounding off errors this is not so

12.13Joe Henry's machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away.the following information is known about the brackets.

2,500

$1.50

$18.75 Lead time 2 days

250

a. Given the above information, what would be the economic order quanity (EOQ)?b. Gicen the EOQ, what would be the average inventory? What would be the annual inventory hold cost?c. Given the EOQ, how many orders would be made each year? What would be the annual order cost?d. Given the EOQ, what is the total annual inventory cost?e. What is the time between orders?

a. Given the above information, what would be the economic order quanity (EOQ)?

D= 2500 units/year Demand

S= $18.75 per order Ordering cost

H= $1.50 /unit/year holding cost

250 =√(2*2500*18.75/1.5)

Answer EOQ= 250

b. Gicen the EOQ, what would be the average inventory? What would be the annual inventory hold cost?

Average inventory= EOQ/2= 125 =250/2

Annual inventory hold cost=Average inventory * holding cost= $187.50 =125*1.5

annual demand

holding cost per bracket per year

order cost per order

working days per year

EOQ=√(2 DS)/H=

Answer: Annual holding cost= $187.50

c. Given the EOQ, how many orders would be made each year? What would be the annual order cost?

No of orders=D/EOQ= 10 =2500/250Ordering Cost=S= $18.75Annual Ordering cost= $187.50 =10*18.75

Answer: Annual ordering cost= $187.50

e. What is the time between orders?

250

Annual demand= 2500

250Therefore Daily demand= 10 =2500/250

Since EOQ= 250Cycle time= Time between orders=EOQ/Daily demand= 25 days

Answer: Time between orders= 25 days

f. What is the reorder point (ROP)?

Lead time= 2 daysDaily demand= 10

Therefore reorder point (ROP)=Lead time * Daily Demand= 20

Answer: reorder point (ROP)= 20

12.19Cesar Rogo Computers,a Mississippi chain of computer hardware and software retail outlets, supplies botheducational and commercial customers with memory and storage devices. It currently faces the following order decision related to purchase of DC-ROMs:

working days per year=

working days per year=

D = 36,000 DisksS = $25 H = $0.45 Purchase price = P $0.85 Discount price = $0.82 Quantity needed to qualify for the discount = 6,000 disks

Should the discount be taken?

D= 36,000 units/year Demand

S= $25.00 per order Ordering cost

H= $0.45 /unit/year holding cost

2000 =√(2*36000*25/0.45)

The annual total cost is:

TC = purchase costs + order costs + holding costs

= PD +SD/Q +H(Q/2)

where Q is the order quantity

=36000P +(36000/Q) 25 + (Q/2)0.45

Price

Q P Order Cost Total Cost Remarks

2000 0.85 30600 450 450 31500 EOQ quantity6000 0.82 29520 150 1350 31020

Total annual cost if discount is taken is less than the total annual cost for EOQ quantityHence discount should be taken

Answer: discount should be taken

EOQ=√(2 DS)/H=

Quantity ordered

Purchase costs

Holding Cost

Quantity at which discount is offered

TABLE 11.3 DOLLARS OF ADDITIONAL SALES NEEDED TO EQUAL $1 SAVED THROUGH THE SUPPLY CHAIN

90%$16.67 $14.29 $12.50 $11.11 $10.00

Using Table 11.3, determine the sales necessary to equal a dollar of savings oon purchases for a company that has:

(See table above)(See table above)

George Walker has complied the following table of six items in inventory along with the unit cost and the annual

Using ABC analysis, which item(s) should be carefully controlled using a quantitative inventory technique

should be carefully controlled using a quantitative inventory technique

William Beville's computer training school, in Richmond, stsocks workbooks with the following characteristics:

Note: For EOQ Annual Holding cost and annual ordering cost should be equal. However because of rounding off errors this is not so

Joe Henry's machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away.

b. Gicen the EOQ, what would be the average inventory? What would be the annual inventory hold cost?c. Given the EOQ, how many orders would be made each year? What would be the annual order cost?

b. Gicen the EOQ, what would be the average inventory? What would be the annual inventory hold cost?

c. Given the EOQ, how many orders would be made each year? What would be the annual order cost?

Cesar Rogo Computers,a Mississippi chain of computer hardware and software retail outlets, supplies botheducational and commercial customers with memory and storage devices. It currently faces the

Remarks

EOQ quantityQuantity at which discount is offered