Question: Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westsides generator production operation, which is operated at a

Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside’s generator production operation, which is operated at a constant rate, will require 1000 components per month throughout the year (12,000 units annually). Assume that the ordering costs are $25 per order, the unit cost is $2.50 per component, and annual holding costs are 20% of the value of the inventory. Westside has 250 working days per year and a lead time of 5 days. Answer the following inventory policy questions:
a. What is the EOQ for this component?
b. What is the reorder point?
c. What is the cycle time?
d. What are the total annual holding and ordering costs associated with your recommended EOQ?

Step by Step Solution

★★★★★

3.34 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a b c d Holdin... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

148-M-S-Q-M (60).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!

A press produces parts used in the manufacture of large-screen plasma televisions. If the press is correctly adjusted, it produces parts with a scrap rate of 5%. If it is not adjusted correctly, it...

The strength of paper used in the manufacture of cardboard boxes (y) is related to the percentage of hardwood concentration in the original pulp (x). Under controlled conditions, a pilot plant...

The head box process is used in the manufacture of paper to transform the pulp slurry flow into a jet of 2 cm and then spread it onto a mesh belt [22]. To achieve desirable paper quality, the pulp...

#3 - Inventory Management Your answers to these case studies will be due, Monday, 27 February 2017. 1. Westside Auto purchases a component used in the manufacture of automobile generators directly...

For the following questions, I need ALL applicable formulas, including the detailed calculations. PLEASE list and explain all the parameters used with the values you determined (Make sure be...

For the following questions, applicable formulas are all required including the detail (No EXCEL worksheet, please). You need to list and explain all the parameters used with the values you...

1. The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 per order to cover the expenses of...

The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 per order to cover the expenses of...

A wheel of radius 0.20 m is mounted on a frictionless horizontal axis. The rotational inertia of the wheel about the axis is 0.050 kg ?? m 2 . A massless cord wrapped around the wheel is attached to...

In a Galluppoll of 1003 randomly selected subjects, 373 said that they have a gun in their home. dhe accompanying Minitab display shows results from a test of the claim that 35% of homes have guns in...

1 . An executive for a NYSE listed firms with dispersed shareholders, none of whom has more control influence than others, is considering the acquisition of three possible firms, which are identical...

A company has EBIT of $30 million, depreciation of $5 million, and a 40% tax rate. It needs to spend $10 million on new fixed assets and $15 million to increase its current assets. It expects its...

The complex [(C18H18N4S)]HgBr2] crystallizes from solution in acetonitrile (CH3CN) to give triclinic crystals with a unit cell volume of 1113.5 3 and a density of 2.16 g.cm-3. Calculate the number of...

Every company faces a variety of pure risks that can have serious financial consequences if a loss occurs. For each of the following threats, identify the most appropriate risk mitigation strategy....

Tom?s Inc. makes two salsa products: Western Foods salsa and Mexico City salsa. Essentially, the two products have different blends of whole tomatoes, tomato sauce, and tomato paste. A jar of Western...

Rockboro Machine Tool Corporation The question is attached to the last photo: EXHIBIT 26.1 Consolidated Income Statements (dollars in thousands, except per-share Projected 2015 2012 2013 2014 Not...

Newspapers Who reads the newspaper more, men or women? Eurostat, an agency of the European Union (EU), conducts surveys on several aspects of daily life in EU countries. Recently, the agency asked...

Open the file Foster Rev. Select cells B6:E8 and name these cells Shipping-Cost. Select cells B19:E21 and name these cells Units-Shipped. Use these names in the sum-product function in cell C14 to...

Open the file Nowlin Plastics. Recall that we have modeled total profit for the product CD-50 in this spreadsheet. Modify the spreadsheet to take into account production capacity and forecasted...

Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $10,000 Revenue per unit = $0.65 Material cost per unit = $0.15 Labor...

This is the Midterm Exam #2 for Math 227 This wxam is on Canvas Module: Probability (Sections 05, 06, and 07),Canvas Module: Discrete Probability Distributions (Sections 08 and 09) &Canvas Module:...

Business Decisions Research the different methods of business decision making. Present the best method you have found. Develop a business financial problem and use the method you have chosen to...

Suppose you short-sell 100 shares of IBM, now selling at $200 per share. What is your maximum possible loss? What happens to the maximum loss if you simultaneously place a stop-buy order at $210?...