5

Gadgets Galore Corp produces J.Pods, music players that can download thousands of songs, Gadgets Galore forecasts that demand in 2020 will be 19,500 J-Pods. The variable production cost of each J-Pod is $50. In its MRP system, due to the large $22,750 cost per setup, Gadgets Galore plans to produce J.Pods once a month in batches of 1,625 units. The carrying cost of a unit in inventory is $21 per year. Requirement 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average half of the units produced in a month are in inventory) Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in Inventory, using an MRP system. (Round your answer to the nearest whole dollar) Cost of producing and carrying Requirement 2. A new manager at Gadgets Galore has suggested that the company use the EOQ model to determine the optimal batch size to produce. (To use the EOQ model, Gadgets Galore needs to treat the setup cost in the same way it would treat ordering cost in a traditional EOQ model.) Determine the optimal batch size and number of batches. Round up the number of batches to the nearest whole number. What would be the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size? Compare this cost to the cost calculated in requirement 1. Comment briefly Begin by selecting the formula used to calculate E0Q. (D = Demand in units for one year, P=Ordering cost per purchase order, C-Carrying cost of one unit in stock, Q Any order quantity) (Round your final answer to the nearest whole number) The optimal batch size is J-pods. (Round up the number of batches to the nearest whole number) The optimal number of batches that would be produced is batches Calculate the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size. (Round your answer to the nearest whole dollar.) Cost of producing and carrying + + Compare this cost to the cost calculated in requirement 1. Comment briefly. I WA PROY an airy J-Poos in inventory? (Assur produced in a month are in inventory.) Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in inventory, using the nearest whole dollar.) Cost of and c + Requirement 2. A new manager at Gadgets Galore has suggested that use the EOQ model, Gadgets Galore needs to treat the setup cost in the Annual demand optimal batch size and number of batches. Round up the number of bato carrying J-Pods in inventory if it uses the optimal batch size? Compare Carrying cost Begin by selecting the formula used to calculate EQQ. (D = Demand in u in stock, Q = Any order quantity.) Cost per each setup Total setup cost (Round your final answer to the nearest whole number.) Total variable production cost The optimal batch size is J-pods. Units per batch (Round up the number of batches to the nearest whole number.) The optimal number of batches that would be produced is batches. Calculate the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size. (Round you on my ownoaa thousands of songs. Gadgets Galore forecasts that demand in 2020 will be 19,500 J-Pods. The variable production cost of each J-Pod is $50. In its MRP system, due to the large $22,750 cost per setup, Gadgets Galore plans to produce J-Pods once a month in batches of 1,625 units. The carrying cost of a unit in inventory is $21 per year. per U U U U TURUT i wowote wa nur carrying J.Pods in inventory if it uses the optimal batch size? Compare this cost to the cost calculated in requirement 1. Comment briefly Begin by selecting the formula used to calculate EOQ (D = Demand in units for one year, P=Ordering cost per purchase order, C=Carrying cost of one unit In stock, Any order quantity) D EOQ batches EOQ 2DP DP e nearest whole number) Is-pods. hos to the nearest whole number) (1+pje is that would be produced is roducing and carrying J.Pods in inventory if it uses the optimal batch sizo. (Round your answer to the nearest whole dollar) Cost of producing and carrying EOQ calculated in requirement 1. Comment briefly. The costs of producing and carrying J-Pods in inventory The in the EOQ formula reduces the effect of errors in computing optimal batch size Requirement 3. Gadgets Galore is also considering switching from an MRP syster to a JIT system. This will result in producing J-Pods in batch sizes of 500 J-Pods and will reduce obsolescence, improve quality, and result in a higher selling price. Gadgets Galore will reduce setup time and setup cost. The new setup cost will be $400 per setup. What is the annual cost of producing and carrying J-Pods in inventory under the JIT system? Calculate the annual cost of producing and carrying J-Pods in inventory under the JIT system. Cost of producing and carrying QC 2