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4 Exercises For Managing Inventories
4 Exercises For Managing Inventories
Answer
Percentage of Dollar
Rank SKU Code Usgae
1 2 61.15%
2 5 26.5%
3 1 6.42%
4 7 4.69%
5 6 0.64%
6 4 0.46%
7 3 0.12%
8 8 0.02%
Bubble, Inc., buys 400 blank cassette tapes per month for use in producing foreign language courseware. The
ordering cost is $12.50. Holding cost is $0.12 per cassette per year.
Answers:
EOQ= 1000 tapes, time between orders = 0.2083 months or 2.5 months
Question 3
Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant rate of 30,000
units per year. It costs Leaky Pipe $10 to process an order to replenish stock and $1 per unit per year to carry
the item in stock. Stock is received 4 working days after an order is placed. No backordering is allowed. Assume
300 working days a year.
f. What is the inventory position immediately after an order has been placed?
Answers
Question 4
At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing
an order to replenish stock is $35, and the annual cost of holding is $6 per book. Stock is received 5 working
days after an order has been placed. No backordering is allowed. Assume 250 working days a year.
Answers
f. The inventory position immediately after an order has been placed is 1,712 books