Inventory Management help
This problem entails knowing Inventory Control Subject to known demand. Based out of the book Production and Operations Analysis-5th edition ISBN 0072865385 which is almost Identical to 4th ed. A local machine shop buys hex nuts and molly screws from the same supplier. The hex nuts cost 15 cents each and the molly screws cost 38 cents each. A setup cost of $100.00 is assumed for all orders. This includes the cost of tracking and receiving the orders. Holding costs are based on a 25% annual interest rate. The shop uses an average of 20,000 hex nuts and 14,000molly screws annually. I need help to:

A- Determine the optimal size of the orders of hex nuts and molly screws, and the optimal time between placement of orders of these two items. B--If both items are ordered and received simultaneously, the setup cost of $100.00 applies to the combined order. Compare the average annual cost of holding and setup if these items are ordered separately; if they are both ordered when the hex nuts would normally be ordered; and if they are both ordered when the molly screws would be normally ordered. Answer Summary

Solution contains calculations of :
1. EOQ
2.Carrying cost.
3. Ordering cost.
4. the optimal time between placement of orders .
Answer Preview
...Annual usage/EOQ = 15,000/5620 = 2.669 or 3 orders
Ordering cost = number of orders*per order cost = 2.669*$100 = $266.9 (Note that inventory and ordering costs are same confirming optimality of the EOQ) Annual cost = $266.95 + $266.9 = $533.85...

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Inventory control
is a supervision of the supply and storage and accessibility of items in order to insure anadequate supply without excessive oversupply. It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.
Inventory is defined as itemized list of goods with their estimated worth...

...Sample Inventory Problems
The TSG Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%.
1. What is the Economic Order Quantity and the total annual cost under the assumption that no backorders are permitted?
A monthly demand of 40 cars...

...levels of inventory, overtime, subcontracting, backordering, workers hired and/or fired. Usually the levels of these variables are expressed in terms of monthly, bi-monthly or quarterly figures.
2. APP is an intermediate term plan that can span a period of 3 months to a year
3. Does APP have to be in terms of a real product?
No, the product can be a pseudo product ( Car with 2 transmissions) or or the generic name for a family of products.
4. Do the costs of carrying...

...INVENTORY CARRYING COSTS:
Inventory carrying costs refers to the costs associated with carrying a quantity of stored inventory. This is one of the vital costs that needs to be optimized in any logistics system. It is a well-known fact that the inventory carrying costs is a part of the total logistics costs of the firm. Aspects of these vital costs can be described and evaluated from a variety of perspectives. Knowledge of...

...Supply Chain Management
L.L Bean Inc
October 27, 2011
Presented by:
Ahsan Khawar
12020378
Fahd Iqtidar Mir
12020367
Nabeel Siraj
12020325
Umair Babar Chishti
12020157
Q.1
L.L. Bean uses several different calculations in order to determine the number of units of a
particular item it should stock, whether it is a new item or a never out item. It first freezes a
forecast for its demand for the upcoming season. This figure is a result of a...

...Machines, Men, materials, Money and Management have become the necessities of every business organization.
Inventory is an essential current asset to any type of production unit. The inventory constitutes of raw materials, work in progress (semi finished goods) and finished goods.
The inventory occupies vital role after cash and receivables. The management of inventory is an...

...a cost of $65. The purchase price paid by MPBC, per bicycle, is roughly 60% of the suggested retail price for all the styles available, and the inventory carrying cost is I % per month (12% per year) of the purchase price paid by MPBC. The retail price (paid by the customers) for the AirWing is $170 per bicycle.
MPBC is interested in making an inventory plan for 2011. The firm wants to maintain a 95% service level with its customers to minimize the losses on the...

...INVENTORYMANAGEMENT
Model 1
2. The Peace Care Hospital uses about 3,500 boxes of sterile bandages per month. The annual carrying cost rate is $2.90 per box per year. A typical box of sterile bandages costs $14.50 to purchase. The ordering cost is $25 each time an order is placed, regardless of the order quantity. There is storage space for at most 1,500 boxes of bandages at any time. The hospital operates 365 days per year. Peace Care Hospital would like to...