Chapter $11$

$8.$ Super K Beverage Company distributes a soft drink that has a constant annual demand rate of $4,600$ cases.$$A $12-$pack case of the soft drink costs Super K $$2\mathrm{.}25.$Ordering costs are $$20$ per order, and inventory$-$holding costs are charged at $25$ percent of the cost per unit. There are $250$ working days per year, and the lead time is $4$ days. Find the economic order quantity and total annual cost, and compute the reorder point.

$11.$ Crew Soccer Shoes Company is considering a change in its current inventory control system for soccer shoes.$$The information regarding the shoes is as follows:$$Average demand $=250$ pairs$/$week$$Lead time $=3$ weeks$$Order cost $=$ $$75/$order$$Unit cost $=$ $$21\mathrm{.}50$Carrying charge rate $=0\mathrm{.}20$Desired service level $=95$ percent$$Standard deviation of weekly demand $=40$Number of weeks per year $=52$The company decides to use a fixed$-$order$-$quantity system. What is the economic order quantity? What should be the reorder point to have a $95$ percent service level? Explain how the system will operate.

$15.$ The J&B Card Shop sells calendars featuring a different colonial picture for each month. The once$-$a$-$year order for each year's calendar arrives in September. From past experience, the September$-$to$-$July demand for the calendars can be approximated by a normal distribution$$with M $=300$ and standard deviation $=20.$ The calendars$$cost $$6\mathrm{.}50$ each, and J&B sells them for $$15$ each.

$$Suppose that J&B throws out all unsold calendars at the end of July. Using marginal economic analysis, how many calendars should be ordered?

$$If J&B sells surplus calendars for $$1$ at the end of July and can sell all of them at this price, how many calendars should be ordered?

Chapter $12$

$1.$ Alpha Medical Manufacturing $($AMM$),$ located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and surgical tools. One product they assemble in their factory is a special aluminum$-$alloy surgical screw used to anchor human tissue to the bone.$$The screw consists of four component parts, one being the aluminum alloy while the other three parts are made of medical grade plastics. AMM is evaluating three Tier $1$ suppliers to manufacture the aluminum part of the orthopedic screw. Annual demand for this item is $20,000$ units per year, with $365$ days in a year. Other information is shown in Exhibit $12\mathrm{.}10.$

a$.$ What is the total annual logistics cost for each supplier when Q $=10,000$ and Q $=20,000$

$2.$ Bragg Johnson, materials manager at Johnson & Sons, has determined that a certain product experienced $3\mathrm{.}8$ turns last year, with an annual sales volume $($at cost$)$ of $$975,000.$ What was the average inventory value for this product last year? What would be the average inventory level if inventory turns could be increased to $6\mathrm{.}0?$