BA501 : The Class : POM : Production : Home Work
Production Planning- Home Work

To complete this assignment successfully, you should:
1. Study the assignment carefully.
2. Use Excel to complete your assignments.
3. Send the Excel file as an attachment through WebMail .

§ Inventory Management §

Assignments

Send  to your instructor a single Excel file (including written answers) as e-mail an attachment through WebMail. addressed to BA501@mail.cba.nau.edu and put BA501 (last name) Assignment name and number somewhere in the e-mail "subject." If you have any questions on this home work, please e-mail me with questions.    Here is the Excel file for this assignment.  Use "save as" to save it to your computer or to a floppy.

Assignment – Inventory Management

1.      Teresa Cohan is attempting to perform an inventory analysis on one of her most popular products.  Annual demand for this product is 5,000 units; unit cost is \$200; carrying cost is considered to be approximately 25% of the unit price.  Order costs for her company typically run nearly \$30/order and lead time averages 10 days (assume a 50 week year).

a. What is the EOQ?

b. What is the ROP?

c. What is the total annual cost?

d. How many orders per year should be placed?

e. How many days exist between orders (assume 250 working days per year)?

2.      Tape enterprises has 10 items in inventory.  The inventory manager has asked for an ABC analysis of the inventory for the following items:

 Item Annual Demand Cost(\$)/Unit 1 3000 50 2 4000 12 3 1500 45 4 6000 10 5 1000 20 6 500 500 7 300 1500 8 600 20 9 1750 10 10 2500 5

3.      Jimmy Stephens, inventory control manager for Cal-Tex, receives wheel bearing from Wheel Rite, a small producer of metal parts.  Wheel Rite can produce only 500 wheel bearings per day.  Cal Tex receives 10000 wheel bearings fro Wheel Rite each year.  Because Cal Tex operates 200 working days each year, its average daily demand of wheel bearings is 50.  Ordering costs for Cal Tex is \$40 per order, and carrying costs is \$0.60 per wheel bearing per year.  Wheel Rite has agreed to ship the maximum number of wheel bearings that it produces each day to Cal-Tex once an order has been received.  How many wheel bearings should Cal Tex order at one time?

4.      Jack McCanna Products offers the following discount schedule for its 4 feet by 8 feet sheets of quality plywood:

 Order Unit Cost 9 sheets or less \$18.00 10 to 50 sheets \$17.50 More than 50 sheets \$17.25

Home Sweet Home Company orders plywood from McCanna. Home Sweet Home has an ordering cost of \$45. Carrying cost is 20%, and annual demand is 100 sheets. What do you recommend?

Once you have completed this assignment you should:

Go on to Inventory Management- Self Test Look here before beginning quiz if using a telephone modem.
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Please reference "BA501 (your last name) Assignment name and number" in the subject line of either below.

E-mail Dr. Rakesh Pangasa at BA501@mail.cba.nau.edu
or call (928) 344-7588. Use WebMail for attachments.