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    AE4 - Activity 5A

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    Maricar Pineda
    This document contains 6 problems involving calculating economic order quantities (EOQ) and reorder points using given data on annual demand, ordering costs, carrying costs, unit costs, and other relevant information. The problems provide real world scenarios around ordering baby dresses, draft beer, noodles, and water testing kits to determine optimal order sizes and inventory levels.

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    AE4 - Activity 5A

    Uploaded by

    Maricar Pineda
    1K views2 pages
    This document contains 6 problems involving calculating economic order quantities (EOQ) and reorder points using given data on annual demand, ordering costs, carrying costs, unit costs, and other relevant information. The problems provide real world scenarios around ordering baby dresses, draft beer, noodles, and water testing kits to determine optimal order sizes and inventory levels.

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    This document contains 6 problems involving calculating economic order quantities (EOQ) and reorder points using given data on annual demand, ordering costs, carrying costs, unit costs, and other relevant information. The problems provide real world scenarios around ordering baby dresses, draft beer, noodles, and water testing kits to determine optimal order sizes and inventory levels.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    AE4 - Activity 5A

    Uploaded by

    Maricar Pineda
    This document contains 6 problems involving calculating economic order quantities (EOQ) and reorder points using given data on annual demand, ordering costs, carrying costs, unit costs, and other relevant information. The problems provide real world scenarios around ordering baby dresses, draft beer, noodles, and water testing kits to determine optimal order sizes and inventory levels.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Activity 5A

    1. The cost of placing an order is P60 and the carrying cost is P30 per unit per year. The estimated
    annual demand is 10,000 units. Find the economic order quantity.

    2. Ann Fransisco, the owner of Ann’s Boutique is planning to order baby dresses for her store. The
    dress manufacturer informed her that if the baby dress order received this month are worth
    P30,000 or more, the manufacturer will sponsor a one-day visit by Dr. Rose Manalo, a
    pediatrician who will come to the store and talk with the mothers about child care. Ann orders
    P350,000 worth of baby dresses per year. Her carrying costs are 20% of average inventory and
    her ordering costs is P300 per order.
    a. If Ann places her order using EOQ model, will the value of her order be sufficient to qualify
    for a visit by Dr. Manalo?
    b. How much is the worth of baby dresses per order?
    c. How many days interval per order?

    3. The following data are for an inventory item in which the EOQ model applies:

    Given: D = 10,000 units (annual demand)


    R = P10 per unit
    P = P500 per order
    C = 25% 0f average inventory

    Find: a. the number of orders per year


    b. the economic order quantity (EOQ)
    c. the amount in pesos per order
    d. the number of days interval between orders
    e. the total inventory costs

    4. A videoke bar buys draft beer by the barrel from a local distributor. The bar has an annual
    demand of 9,000 barrels, which it purchases at a price of P205 per barrel. The annual carrying
    cost is 12% of the average inventory and the cost per order is P160. The distributor has offered
    the bar owner a reduced price to P190 per barrel if the owner will order a minimum of 300
    barrels per order. Should the bar owner take the offer?
    5. A supermarket in Makati stocks no-cook noodles in packs of 75 grams each. The annual demand
    is 100,000 packs per year at a unit cost of P10. Ordering cost Is P120 per order of the noodles
    and a carrying costs of 18% of average inventory. Once an order is placed it takes 4 days to
    received the order from a food distributor. Determine the following:
    a. Optimum order size
    b. Total inventory cost
    c. Reorder point
    6. Below are the data for water-testing kits stocked by a field unit of Environmental Protection
    Agency. Optimal order (Qn) = 6 orders per year.
    Average daily use : 6 kits
    Average reorder period : 20 kits per day
    Cost to store one kit per year : P8
    Estimated out of stock cost per kit : P30

    Usage during reorder Probability of


    period usage
    40 10
    60 15
    80 20
    100 35
    120 15
    140 3
    160 2

    What is the reorder point?

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