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MAXImum [283]
3 years ago
14

A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of

SKUs. Following are the characteristics of one item:
Demand (D) = 72 units/week (Assume 48 weeks per year)
Ordering and setup cost (S) = $55 /order
Holding cost (H) = $18 /unit/year
Lead time (L) = 3 week(s)
Standard deviation of weekly demand = 18 units
Cycle-service level = 90 percent
EOQ = 145 units
Under the same information as above, develop the best policies for a periodic review system.
1. The value of P that gives the same approximate number of orders per year as the EOQ is weeks (Hint: please round your answer to the nearest positive integer number).
2. The target inventory level that provides an 88 percent cycle-service level is units (Hint: please round your answer to the nearest positive integer number).
Business
1 answer:
Maru [420]3 years ago
3 0

Answer:

Explanation:

Given that:

weekly demand = 72 units

no of weeks in 1 year = 48

Then; total demand = 72 × 48 = 3456 units

No of orders = \dfrac{\text{total demand }}{EOQ}

= \dfrac{\text{3456}}{145}

∴

The periodic review (P) = \dfrac{1}{no \ of \ orders}

= \dfrac{1}{\dfrac{3456}{145}}

= \dfrac{145}{3456}

= 0.041956 year

≅ 2 weeks

Z score based on 88 percent service level = NORMSINV(0.88) = 1.18

Here;

Lead time = 3 wks

P = 2 weeks

Thus protection interval = ( 3+2) weeks

= 5 weeks

Safety stock = z-score × std dev. of demand at (P+L) days

std dev = \sqrt{5 } \times 18 = 2.236 × 18

std dev = 40.248 units

Safety stock = 1.18 × 40.248

safety stock = 47.49 units

Safety stock ≅ 48 units

Average demand during(P + L) = 5 × 72 units

= 360 units

Target inventory level = average demand + safety stock

= 360 units + 48 units

= 408 units

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Answer:

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                                                        Amount in $           Amount in $

Bank statement Balance                                                3,868

Add;

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Deduct;

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Explanation:

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Argon Chemicals had a total overhead amount of $47,200 during the month of June. Of that total, 58% was related to the factory,
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Answer:

(C )  debit; $27,376.

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Slapshot Company makes ice hockey sticks. Last week, direct materials (wood, paint, Kevlar, and resin) costing $28,000 were put
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Answer:

Part 1. Calculate the total prime cost for last week

Direct materials                    28,000

<u><em>Add </em></u>Direct labor                   28,000

Prime Cost                             56,000

Part 2. Calculate the per-unit prime cost

per-unit prime cost=$56,000/5,600

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Part 3. Calculate the total conversion cost for last week

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<u>Add </u>Manufacturing Overheads 55,000

Total conversion cost                83,000

Part 4. Calculate the per-unit conversion cost.

per-unit conversion cost=$83,000/5,600

                                         =$14.82

Explanation:

Part 1. Calculate the total prime cost for last week

Prime Cost = Direct Materials + Direct Labor

Part 2. Calculate the per-unit prime cost

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Part 4. Calculate the per-unit conversion cost.

Per-unit conversion cost =Total Conversion Cost / number of units manufactured

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