Individual Assignment

Chapter 12: Example 3, 4, and 5

Disusun untuk memenuhi tugas mata kuliah Technology & Operations Management

Dosen Pengampu:
Budi Hartono, S.T., MPM., Ph.D

Disusun oleh:
Aliza Safira Salsabilla P. (21/490334/PEK/28167)

MAGISTER MANAGEMENT
FAKULTAS EKONOMI DAN BISNIS
UNIVERSITAS GADJAH MADA YOGYAKARTA
2022
Example 3
Sharp, Inc., a company that markets painless hypodermic needles to hospitals, would like to
reduce its inventory cost by determining the optimal number of hypodermic needles to obtain per
order. The annual demand is 1,000 units; the setup or ordering cost is $10 per order; and the
holding cost per unit per year is $0.50
Solution:

Q* =
√ 2 DS
H

Q* =
√ 2(1,000)(10)
0.50
= √ 40,000
= 200 units
If D increases to 1,200 units, what is the new Q*?
Solution:

Q* =
√ 2 DS
H

Q* =
√ 2(1 , 2 00)(10)
0.50
= √ 4 8 ,000
= 219 units
So, if the demand increases to 1,200 units, the number of orders to be proceeded also increases to
219 units.

Example 4
Sharp, Inc. (in example 3) has a 250-day working year and wants to find the number of orders
(N) and the expected time between orders (T).
Solution:
Demand
N=
Order quantity
1000
=
200
= 5 orders per year
 Number of working days per year
T=
N
250
=
5
= 50 days between orders
If demand is 1,200 units instead of 1,000, find N and T.
Solution:
Demand
N=
Order quantity
1200
=
219
= 5.48 orders per year
Number of working days per year
T=
N
250
=
5.48
= 45.62 days between orders
So, if the demand is 1,200 units then the number of orders per year is 5.48 orders and the
expected time between orders is 45.62 days.

Example 5
Sharp, Inc. (from example 3 dan 4) wants to determine the combined annual ordering and
holding costs.
Solution:
D Q
TC = S+ H
Q 2
1,000 200
= ( 10 ) + ( 0.50)
200 2
= (5)(10) + (100)(0.50)
= 50 + 50
= $100
Find the total annual cost if demand is 1,200 units.
Solution:
 D Q
TC = S+ H
Q 2
1, 2 00 219
= ( 10 ) + (0.50)
2 19 2
= (5.48)(10) + (109.5)(0.50)
= 54.8 + 54.75
= $109.55
So, if the demand is 1,200 then the combined annual ordering and holding costs is $109.55