Problem $2$: Inventory Planning Problem $2$: Inventory Planning at York Products Corporation $(30$ marks$)$

The York Products Corporation $($YPC$)$ is developing ordering policies for its materials that it

stocks for resale to its customers. The materials have been classified into three classes:

Answer the following questions:

a$.)$ Assume the LM$500$ costs $$24\mathrm{.}95,$ and YPC considers that $10,000$ of the parts will be needed

annually. YPC also estimates a $40$ percent carrying cost for its inventory per year, it costs

approximately $$100$ to process, receive, and inspect an order for these parts. YPC uses a fixed

order quantity inventory system for Class A materials. How many of the parts should be ordered

when the material is replenished?

b$.)$ The supplier of the LM$500$ has offered to ship the part at a race of $100$ per day during

shipping periods via the supplier's own truck and YPC$\text{'}$s plant works $300$ days per year. If all

other data in part a$)$ above remain the same:

b$-1)$ How many parts should be ordered when the LM$500$ is replenished?

b$-2)$ What annual savings will come to YPC if the new shipping policy is enacted?

c$.)$ The supplier of the LM$500$ has agreed to give YPC a quantity discount, which means more

order quantity the company places, more discounts will be applied on the cost per part. The

following is the cost schedule that offer to YPC:

If all other data in part a$)$ above remain the same:

c$-1)$ How many parts should be ordered when the LM$500$ is replenished?

c$-2)$ What annual savings will come to YPC because of the quantity discounts?

d$.)$ The supplier of the LM$500$ has offered to combine its offer of gradual supply during shipping

periods in part b$)$ above and the quantity discount offer in part c$).$ How many parts should be

ordered when the material is replenished if all other data remain the same as in parts b$)$ and c$)?$

e$.)$ Assume the EM$80$ costs $$3\mathrm{.}40$ per pound. YPC considers that $8,000$ pounds will be needed

annually, and YPC$\text{'}$s plant works $300$ days per year. It costs approximately $$25$ to process,

receive, and inspect an order for the material. YPC uses a fixed order period inventory system for

Class C materials. Assume the carrying cost rate for one EM$80$ per year is also $40$ percent. How

often should the material be ordered?at York Products Corporation $(30$ marks$)$

The York Products Corporation $($YPC$)$ is developing ordering policies for its materials that it

stocks for resale to its customers. The materials have been classified into three classes: