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Maynard Shoe Co. produces and sells excellent quality walking shoes. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services
Maynard Shoe Co. produces and sells excellent quality walking shoes. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Maynard uses an EOQ model to determine the number of pairs of shoes to order for each warehouse from the factory. Annual demand for Warehouse OR2 is approximately 126,000 pairs of shoes. The ordering cost is $243 per order. The annual carrying cost of a pair of shoes is $2.10 per pair. Required Requirement 1. Use the EOQ model to determine the optimal number of pairs of shoes per order. = 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, Q = Any order quantity.) The optimal number of pairs of shoes per order is pairs. (Round your final answer to the nearest whole number.) Requirement 2. Assume monthly demand is 10,500 shoes. Each month consists of approximately 4 weeks. If it takes 1 week to receive an order, at what point should warehouse OR2 reorder shoes? (Calculate the monthly demand, and then calculate the weekly demand.) x = Reorder point X pairs Requirement 3. Although OR2's average monthly demand is 10,500 pairs of shoes (126,000/12 months), demand each month may vary from the average by up to 12%. To handle the variation in demand, Maynard has decided that OR2 should maintain enough safety stock to cover any demand level. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder quantity? Due to the variation in demand, Warehouse OR2 should hold pairs of shoes in safety stock. This will the reorder point to pairs of shoes. The reorder quantity will Requirement 4. What is the total relevant ordering and carrying costs with safety stock and without safety stock? Determine the formula used to calculate total relevant ordering costs, and then calculate the costs with safety stock and without safety stock. (If an amount is not used, leave the cell blank, do not enter "0". Round your final answers to the nearest whole dollar.) x = Ordering cost Safety stock: With ) x = Without ) x Determine the formula used to calculate total relevant carrying costs, and then calculate the costs with safety stock and without safety stock. (If an amount is not used, leave the cell blank, do not enter "O". Round your final answers to the nearest whole dollar.) 12)+ ] x = Carrying cost Safety stock: With [C 12 )+ 12) + ] x ] x III Without [C Maynard Shoe Co. produces and sells excellent quality walking shoes. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Maynard uses an EOQ model to determine the number of pairs of shoes to order for each warehouse from the factory. Annual demand for Warehouse OR2 is approximately 126,000 pairs of shoes. The ordering cost is $243 per order. The annual carrying cost of a pair of shoes is $2.10 per pair. Required Requirement 1. Use the EOQ model to determine the optimal number of pairs of shoes per order. = 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, Q = Any order quantity.) The optimal number of pairs of shoes per order is pairs. (Round your final answer to the nearest whole number.) Requirement 2. Assume monthly demand is 10,500 shoes. Each month consists of approximately 4 weeks. If it takes 1 week to receive an order, at what point should warehouse OR2 reorder shoes? (Calculate the monthly demand, and then calculate the weekly demand.) x = Reorder point X pairs Requirement 3. Although OR2's average monthly demand is 10,500 pairs of shoes (126,000/12 months), demand each month may vary from the average by up to 12%. To handle the variation in demand, Maynard has decided that OR2 should maintain enough safety stock to cover any demand level. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder quantity? Due to the variation in demand, Warehouse OR2 should hold pairs of shoes in safety stock. This will the reorder point to pairs of shoes. The reorder quantity will Requirement 4. What is the total relevant ordering and carrying costs with safety stock and without safety stock? Determine the formula used to calculate total relevant ordering costs, and then calculate the costs with safety stock and without safety stock. (If an amount is not used, leave the cell blank, do not enter "0". Round your final answers to the nearest whole dollar.) x = Ordering cost Safety stock: With ) x = Without ) x Determine the formula used to calculate total relevant carrying costs, and then calculate the costs with safety stock and without safety stock. (If an amount is not used, leave the cell blank, do not enter "O". Round your final answers to the nearest whole dollar.) 12)+ ] x = Carrying cost Safety stock: With [C 12 )+ 12) + ] x ] x III Without [C
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