home work chp 12,13,14

\fYasuko's Art Emporium (YAE) ships art from its studio located in the Far East to its distribution center located on the West Coast of the United States. YAE can send the art either via transoceanic ship freight service (15 days transit) or by air freight (2 days transit time). YAE ships 18,000 pieces of art annually. Air Freight Time Demand Avg Tran Inv (ATI) 2 18,000 Freight Serv 15 18,000 ATI What additional information would be needed to make a comparison? tD 365 Frederick's Farm Factory (FFF) currently maintains an average inventory valued at $3,400,000. The company estimates its capital cost at 10 percent, its storage costs at 4.5 percent, and its risk cost at 10 percent. Calculate the annual holding cost rate for FFF and the holding costs for FFF. Rate Holding Cost 3,400,000.00 Capital Cost 10.0% Storage Cost 4.5% Risk Cost 10.0% Holding Cost A local nursery, Greens, uses 1560 bags of plant food annually. It costs $10 to place an order for plant food. In an effort to reduce its inventory Rapid Grower, the supplier of plant food for Green, is offering Greens two additional price breaks to consider. If the nursery orders a three month supply, the cost per bag is $16. If Green orders a six month supply, the cost per bag is $14.50. Greens estimates its holding cost to be 25 percent of the unit price. Determine the most cost effective ordering policy for Greens. Demand Ordering cost Unit Price Holding rate EOQ Total Costs Months 3 1560 $10.00 $14.50 25% Months 6 1560 $10.00 $16.00 25% =SQRT(2*B11*B12/(B14*B13)) Sam's Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates fifty-two weeks per year and weekly demand is 150 filters. Sam estimates that it costs $20 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 650 filters. Calculate the total annual costs associated with Sam's current ordering policy. Annual Demand (D) Ordering cost (S) Holding costs (H) Quantity (Q) Total Costs $20.00 $3.00 650 =(Demand/Qty*OrderingCost) +(Qty/2*Holding costs) The local Office of Tourism sells souvenir calendars. Sue, the head of the office, needs to order these calendars in advance of the main tourist season. Based on past seasons, Sue has determined the probability of selling different quantities of the calendars for a particular tourist season. The Office of Tourism sells calendars for $12.95 each. The calendars cost Sue $5 each. The salvage value is estimated to be $.50 per unsold calendar. Determine how many calendars Sue should order to maximize expected profits. Price Cost Salvage Value Ordered 75000 80000 85000 90000 95000 $12.95 $5.00 $0.50 75000 0.15 80000 0.25 Demand 85000 0.30 90000 0.20 95000 0.10 Expected Profit =$A$13*($B$7-$B$8) =(B$11*($B$7-$B$8))-(($A14-B$11)*($B$8-$B$9)) Tip: Remember to use absolute referencing by placing a $ in front the Row number, and or the Column letter, to lock in the reference. See the Overview of Formulas information sheet from Excel Help files. Given the following list of items, calculate the annual usage costs of each item. Classify each item as A, B, or C. Item 101 102 103 104 105 201 202 203 204 205 Annual Demand 500 1,500 5,000 250 1,500 10,000 1,000 1,500 500 100 Ordering Cost $10 $10 $25 $15 $35 $25 $10 $20 $40 $10 Holding Annual Percentage of Unit Price Usage Cost Classification Cost Total 20% $0.50 $250 30% $0.20 $300 30% $1.00 $5,000 25% $4.50 $1,125 35% $1.20 $1,800 15% $0.75 $7,500 20% $1.35 $1,350 25% $0.20 $300 25% $0.80 $400 15% $2.50 $250 Total Classification Table 0% C 5% B 25% A Tax Preparers, Inc. works 250 days per year. The company uses adding machine tape at a rate of eight rolls per day. Usage is believed to be normally distributed with a standard deviation of three rolls during lead time. The cost of ordering the tape is $10 and holding costs are $0.30 per roll per year. Lead time is two days. Find z Demand/day (d) Total Demand (D) Lead time Ordering cost Holding costs EOQ RR(97%) SS(97%) RR(99%) SS(99%) 0.9700 0.9900 1.880794 2.326348 8 2 $10.00 $0.30 http://www.youtube.com/watch?v=CzEMKiz0fHU Problem Cost data Regular-time labor cost per hour Overtime labor cost per hour Subcontracting cost per unit (labor only) Holding cost per unit per period Back-order cost per unit per period Hiring cost per employee Firing cost per employee Capacity data Beginning workforce Beginning inventory Labor standard per unit Regular-time available per period Overtime available per period Subcontracting maximum per period Subcontracting minimum per period Demand data Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 2 $10.00 $15.00 $84.00 $10.00 $20.00 $600.00 $450.00 Use table 13-12 for formulas Use data from Problem Data in text, pg. 534 Period 1 Demand Cumulative Demand Cum Dem/#Periods Period Production Cum Production Ending Inventory 2 3 4 5 6 Total 0 use the max of the row above. Number of employees 210 employees Number to hire Number to fire 400 units 26.66667 6 hrs 4 wks Costs of Plan 160 hours Regular time labor 32 hrs 1000 units Holding costs Hiring 500 units Total costs units 6000 4800 units Cost per unit units 7840 units 5200 units 6560 units 3600 $0.00 Problem CHASE PLAN Cost data Regular-time labor cost per hour Overtime labor cost per hour Subcontracting cost per unit (labor only) Holding cost per unit per period Back-order cost per unit per period Hiring cost per employee Firing cost per employee Capacity data Beginning workforce Beginning inventory Labor standard per unit Regular-time available per period Overtime available per period Subcontracting maximum per period Subcontracting minimum per period Demand data Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 3 Use table 13-12 for reference Period Demand (net of beg inventory) Production per period Employees needed in period Number to hire Number to fire $10.00 $15.00 $84.00 $10.00 $20.00 $600.00 $450.00 210 employees 400 units 6 hrs 27 160 hours 4 wks 32 hrs 1000 units 500 units 6000 4800 7840 5200 6560 3600 units units units units units units Costs of Plan Regular time labor Hiring Cost Firing Costs Total costs Cost per unit 1 5,600 2 4,800 3 7,840 4 5,200 5 6,560 6 3,600 Total 33,600 =F4 =F5/D14 =MAX(B12-F7,0) =MAX(F7-B12,0) = total employees needed X regular hours per period X labor cost per hour = total hired X hiring cost per employee = total fired X firing cost per employee = total of all costs above = the total of all costs divided by the total units produced Problem DRAPER TAX COMPANY Cost data Regular-time labor cost per hour Overtime labor cost per hour Tempory worker cost per hour Hiring cost per employee Firing cost per employee Backorder Cost 8 Period Demand Cumulative Demand Cum Dem/#Periods Period Production Cum Production Ending Inventory $25.00 $37.50 $40.00 $2,000.00 $1,200.00 $500.00 Capacity data Beginning workforce Labor standard per unit Regular-time available per period Overtime available per period Demand data Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Use table 13-12 for reference 12 employees 12 hrs 40 hours 8 hrs 48 36 50 40 38 48 clients clients clients clients clients clients Number of employees Number to hire Number to fire 1 2 3 4 5 6 Total Problem DRAPER TAX COMPANY 10 (NO BACKLOG) Cost data Regular-time labor cost per hour Overtime labor cost per hour Tempory worker cost per hour Hiring cost per employee Firing cost per employee Backorder Cost $25.00 $37.50 $40.00 $2,000.00 $1,200.00 $500.00 Use table 13-12 (CHASE AGGERATE PLAN) Period Demand Hours required Hours available Overtime Hours Undertime Hours Number of employees Capacity data Beginning workforce Labor standard per unit Regular-time available per period Overtime available per period 12 employees 12 hrs 40 hours 8 hrs Costs of Plan Regular time labor Overtime costs Total costs Cost per unit Demand data Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 48 36 50 40 38 48 clients clients clients clients clients clients 1 2 3 4 5 6 Total