 # MgtOp 340 Final Exam Notes

Good Essays
5984 Words Grammar Plagiarism  Writing  Score MgtOp 340 Final Exam Notes MgtOp 340 Exam 2

EOQ
Suppose that JJ Inc. has a production rate of 250,000 units per year and a demand of 800 per day. JJ has a setup cost of \$40, and a holding cost percentage of 25%. JJ sells their product for \$50 and it costs them \$30 to produce it. If JJ works for 250 days per year, what is the optimal batch size? p=(250,000/250days)=1,000 P=250,000(production rate) d=800 D=(800*250days)=200,000 S=\$40 I=.25 c=\$30 H=(.25*30)=7.5 Optimal batch size => sqrt([2DS/H(1-d/p)] = 3266

Suppose that the annual EOQ cost (setup plus inventory holding) for a product stored in a warehouse is \$42,000. What would the total company EOQ cost be if the firm decided to equally allocate the demand among 25 warehouses instead of one?
*\$210,000

Consider the following all units’ quantity discount schedule and calculated EOQ’s.
Units Ordered
Price Per Unit
EOQ at that Price
0-499
\$134.00
520
500-1,499
\$122.00
1200
2,000-3,999
\$120.00
3400
4,000-5,999
\$116.00
3900
>=6,000
\$110.00
5000
The total annual costs of exactly which order quantities must be checked to determine the optimal solution?
*{3400,4000,6000}

Consider a company that uses a continuous review system. They currently have 0 units of inventory on have, an order of 500 schedule to arrive tomorrow, and 50 backorders. Assume that they have a 5-day protection interval, and the average daily demand is 100 units per units per day. If they hold 75 units of safety stock, how many should you order?
*The EOQ amount

You are the supplier of Hula-Hoops to Wal-Mart, and they are your only consumer. Wal-Mart uses its EOQ to determine that they should buy 2000 units from you each time they order. Given this information which of the following could not be an optimal order quantity for your company?
*15,000

No names:
2. A product for Simpson’s Stored has an annual demand of 72,000 units. The setup cost per order is \$75, and the annual holding cost percentage is 40%. The product is purchased for \$60 and

## You May Also Find These Documents Helpful

• Satisfactory Essays

d. What should the order size be if your friend wants to minimize the annual sum of ordering and holding costs?…

• 517 Words
• 1 Page
Satisfactory Essays
• Good Essays

Consider a firm with a daily demand of 100 units, a production rate per day of 500 units, a setup cost of \$200, and an annual holding cost per unit of \$10. Suppose that the firm operates 300 days per year. How many units of inventory must their storage area be able to hold?…

• 2532 Words
• 11 Pages
Good Essays
• Satisfactory Essays

5) Refer to the information above. What is the optimal number of orders per year?…

• 1687 Words
• 12 Pages
Satisfactory Essays
• Satisfactory Essays

a) What is the optimal solution, and what are the optimal production quantities? W=1.0 M=1.250 PROFIT=800000…

• 292 Words
• 2 Pages
Satisfactory Essays
• Good Essays

b. What is the reorder point (in units) for each supplier? Assume for now that no safety stocks are held and use a 360-day year.…

• 1780 Words
• 8 Pages
Good Essays
• Good Essays

In order to minimize total cost, the order size should be 337 when company A orders new inventory.…

• 553 Words
• 3 Pages
Good Essays
• Good Essays

Step 5: Round up to the nearest Unit to get you final answer. In order to minimize total cost, the order size should be 4560 when company A orders new inventory.…

• 611 Words
• 3 Pages
Good Essays
• Satisfactory Essays

From this data, as well as the data given on manufacturing methods and hours per method, a solution could be found utilizing the linear programming method of analysis. To analyze the data, the actual profit on each material was first calculated. This was done by taking the selling price and subtracting each cost associated with the given material. The results are \$34.00 for the 75C, \$30.00 for the 33C, \$60.00 for the 5X, and \$25.00 for the 7X. The next step was to determine how many constraints would be part of the analysis. There was determined to be 10 constraints in the analysis, 4 for the April orders, 4 for the manufacturing methods and 2 for the minimum orders promised by Vivian. With this data, the amount of each product to be produced to maximize profit for April could be determined. The results can be seen in Table 3.…

• 453 Words
• 4 Pages
Satisfactory Essays
• Good Essays

The following linear programming problem has been written to plan the production of two products. The company wants to maximize its profits.  X1 = number of product 1 produced in each batch X2 = number of product 2 produced in each batch  MAX: 150 X1 + 250 X2 Subject to: 2 X1 + 5 X2 ≤ 200 − resource 1  3 X1 + 7 X2 ≤ 175 − resource 2 X1, X2 ≥ 0. How many units of resource 1 are consumed by each unit of product 1 produced? 2…

• 727 Words
• 3 Pages
Good Essays
• Satisfactory Essays

B. Their reservation price should be something less than \$33 dollars per unit, so they can save more money per unit at the end of the production.…

• 616 Words
• 3 Pages
Satisfactory Essays
• Satisfactory Essays

To find the lot size for Company B you need to use the economic production lot size model. First you need to find the holding cost. To find the holding cost you multiply the annual holding cost rate by the unit cost of the item (Ch=IC). In this example the annual holding cost rate is 4% and the unit cost is \$250 (Ch=4%X\$250 or Ch=\$10). Now that you have the holding cost you can find the optimal lot size To find the optimal lot size you take the square root of 2 times the demand times the set up cost divide by the holding cost times 1 minus demand over the production. Q* = the square root of 2(D)(Cs)/Ch(1-D/p) or Q*= the square root of 2(5,200,000)(\$500)/\$10(1-5,200,000/88,400,000). When you complete this equation you get 23,505.318547065042. Because you can not create a partial lot you need to round up. This gives you 23,506 as the optimal lot…

• 373 Words
• 1 Page
Satisfactory Essays
• Satisfactory Essays

____ 2. For product M, a firm has an annual holding cost percentage of 20%, an ordering cost of \$80 per order, and annual demand of 10,000 units. If they order less than 1,100 units at a time, the purchase price is \$10.00. If they order 1,100 or more, then the purchase price for all units is \$8.00. What are the possible optimal solutions?…

• 1199 Words
• 8 Pages
Satisfactory Essays
• Good Essays

(b) The owner would like to ensure no stock-outs in 95% of the cycles (i.e., the service level is 95%). The safety stock the store should have is (in quarts):…

• 1559 Words
• 7 Pages
Good Essays
• Good Essays

2. Compute the probability of a stock-out for the order quantities suggested by members of the management team.…

• 308 Words
• 2 Pages
Good Essays
• Good Essays

1. Compute the company’s total production cost per unit if 25,000 units had been produced.…

• 526 Words
• 4 Pages
Good Essays