Assignment Problems (28 points in total):

1.      Ray’s Satellite Emporium wishes to determine the best order size for its best-selling satellite dish. Ray has estimated the annual demand for this model at 5,000 units. His cost to carry one unit is $80 per year per unit, and he has estimated that each order costs $20 to place.

 

Using the EOQ model, how many should Ray order?  Please provide the formula, at least one step of calculation, and the correct order size for full credit.(6 points)

 

2.      Given the following information, formulate a continuous-review inventory management system. The item is demanded 50 weeks a year. 

Item cost

$20

Standard deviation of weekly demand

 

Order cost

$250

25 per week

Annual holding cost (%)

10% of item cost

Lead time

1 week

Annual demand

25,000

Service probability

95%

Average demand

500 per week

 

 

 

Compute the order quantity and reorder point. (14 points)

For order quantity, please provide the formula, at least one step of calculation, and the correct value for full credit.

For reorder point, please provide the formula, at least one step of calculation, the correct z value, and the correct answer for full credit.

 

 

3.      A company needs to establish kanbans to feed a new work cell. The following data have been provided.

Weekly demand

800 units

Production lead time

1 week

Container size

40 units

Smoothing factor

1.3

 

(a)  How many kanbans are needed? Please provide at least one step of calculation and the correct answer for full credit. (4 points)

 

(b)How many containers are needed? Please provide at least one step of calculation and the correct answer for full credit. (4 points)

 

 

 

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