Supplement
C Special Inventory Models
PROBLEMS
Noninstantaneous Replenishment
1. Bold Vision Inc.
2 DS p
ELS =
H p−d
2 ( 625 )( 52 )(100 ) 1, 736
=
.2 (130 ) 1, 736 − 625
= 250, 000 1.5626 = ( 500 )(1.25 )
= 625 toner cartridges
2. Sharpe Cutter
a. ELS = 2 DS p
H p−d
2 (100, 000 )( 300 ) 450
=
1.20 ( 450 − 400 )
= ( 7, 071.07 )( 3) = 21, 213 knives
b. Total annual cost
Q ⎛ p − d ⎞ D
C = ⎜ ⎟ ( H ) + ( S )
2 ⎝ p ⎠ Q
21, 213 ⎛ 450 − 400 ⎞ 100, 000
= ⎜ ⎟ (1.20 ) + (300 )
2 ⎝ 450 ⎠ 21, 213
= $1, 414.21 + $1, 414.22 = $2,828.44
ELS 21, 213
c. TBO = ( 250 days year ) = ( 250 ) = 53 days
D 100,000
ELS 21, 213
d. Production time/lot = = = 47.1 days
p 450
C-1
Copyright © 2016 Pearson Education, Inc.
, C-2 PART 2 Managing Customer Demand
3. Sud’s Bottling Company
2 DS p
ELS =
H p−d
2 ( 600 )( 52 )(800 ) 2400
=
.30 (12.50 ) 2, 400 − 600
= 13,312, 000 1.333 = ( 3, 648.56 )(1.1547 )
= 4, 213 cases
4. One-Eyed Toad
a. The production lot size that minimizes total cost is
b. The average time between orders is
c. The minimum total of setup and holding costs is
Quantity Discounts
5. Bucks Grande major-league baseball. Results from POM for Windows Software:
Demand rate(D) 17500
Setup/Ordering cost(S) 100
Holding@38%
Price Ranges From To Price
1 999 7.5
1000 4999 7.25
5000 999999 6.5
Results
Optimal order quantity (Q*) 5000
Maximum Inventory Level (Imax) 5000
Average inventory 2500
Orders per period(year) 3.5
Annual Setup cost $350
Annual Holding cost $6175
Unit costs (PD) $113750
Total Cost $120275
Details ----------
Setup Holding Unit Total
Copyright © 2016 Pearson Education, Inc.
C Special Inventory Models
PROBLEMS
Noninstantaneous Replenishment
1. Bold Vision Inc.
2 DS p
ELS =
H p−d
2 ( 625 )( 52 )(100 ) 1, 736
=
.2 (130 ) 1, 736 − 625
= 250, 000 1.5626 = ( 500 )(1.25 )
= 625 toner cartridges
2. Sharpe Cutter
a. ELS = 2 DS p
H p−d
2 (100, 000 )( 300 ) 450
=
1.20 ( 450 − 400 )
= ( 7, 071.07 )( 3) = 21, 213 knives
b. Total annual cost
Q ⎛ p − d ⎞ D
C = ⎜ ⎟ ( H ) + ( S )
2 ⎝ p ⎠ Q
21, 213 ⎛ 450 − 400 ⎞ 100, 000
= ⎜ ⎟ (1.20 ) + (300 )
2 ⎝ 450 ⎠ 21, 213
= $1, 414.21 + $1, 414.22 = $2,828.44
ELS 21, 213
c. TBO = ( 250 days year ) = ( 250 ) = 53 days
D 100,000
ELS 21, 213
d. Production time/lot = = = 47.1 days
p 450
C-1
Copyright © 2016 Pearson Education, Inc.
, C-2 PART 2 Managing Customer Demand
3. Sud’s Bottling Company
2 DS p
ELS =
H p−d
2 ( 600 )( 52 )(800 ) 2400
=
.30 (12.50 ) 2, 400 − 600
= 13,312, 000 1.333 = ( 3, 648.56 )(1.1547 )
= 4, 213 cases
4. One-Eyed Toad
a. The production lot size that minimizes total cost is
b. The average time between orders is
c. The minimum total of setup and holding costs is
Quantity Discounts
5. Bucks Grande major-league baseball. Results from POM for Windows Software:
Demand rate(D) 17500
Setup/Ordering cost(S) 100
Holding@38%
Price Ranges From To Price
1 999 7.5
1000 4999 7.25
5000 999999 6.5
Results
Optimal order quantity (Q*) 5000
Maximum Inventory Level (Imax) 5000
Average inventory 2500
Orders per period(year) 3.5
Annual Setup cost $350
Annual Holding cost $6175
Unit costs (PD) $113750
Total Cost $120275
Details ----------
Setup Holding Unit Total
Copyright © 2016 Pearson Education, Inc.
