Operations Management Capacity Cushion – Business Plan – studentMBA
Search
Essays
Sign up
Sign in
Contact us
Tweet
Index
/Business
Operations Management Capacity Cushion
Chapter 9 SUPPLEMENT C1)Annual demand =2750 rollsCost/roll=875Holding Cost=12%Order cost=45a) How many rolls should yellow press order at a time?The Economic Order Quantity isEOQ= (2DS/H)1/2D= Demand in rolls/years=Cost/order =45H= Cost/roll * annual holding cost =875*0.12= 105= (2*2750*45/105)1/2=48.55=49 rolls at a timeb) Find time between orders? (Assume 365 workdays/yr)The time between order (TBO), expressed in days is:TBOEOQ = EOQ/D (365workdays/year)= (49 / 2750)*365=6.503636=6.5 days2) Babble Inc buys 425 blank tapes/monthOrdering Cost= 11.75Holding Cost=0.25/cassette per yearHow many tapes should Babble order at a time?Economic Order Quantity= EOQ= ?Demand in tapes/year = D =425*12= 5100 TapesOrdering Cost= S= 11.75Holding cost/per tape per year =H=0.25EOQ= (2DS/H)1/2EOQ= (2*5100*11.75/0.25)1/2=692.387=692 TapesB) What is the time between orders (TBO)?TBOEOQ = EOQ/D =692/425 =1.628235 =1.6Rough:EOQ50.15 =(2*5100*11.75/0.25)1/23) Price RangeLower QuantityUpper QuantityPrice per Unit11999$7.5521,0004,999$7.3535,000999999$6.60EOQ = Economic Order QuantityD= Annual Demand =320 *50
S= Annualset-up cost/lot=100H= Annual holding cost/unit=38%Calculate EOQ for lowest price in tableEOQ= (2DS/H)1/2 EOQ6.60 = (2*320*50*100/0.38*6.60)1/2=1129.564=1130 baseballsSolution is infeasible as 1130 units corresponds to price of $7.35/unit and not $6.60/unitCalculate EOQ for next higher price in tableEOQ7.35 = (2*320*50*100/0.38*7.35)1/2=1070.383785=1070 baseballsSolution is feasible as 1070 units rightly corresponds to $ 7.35/unitWe will now determine whether total cost can be reduced by purchasing 5000 baseballs that corresponds to lowest price/unit. For this, we need to find total annual cost given the lot size is 1070 baseballs. P= Price per purchased unitCQ = (Q/2)* H + (D/Q) *S + PDC1070 = (1070/2)*0.38*7.35 + (320*50)/1070 *100 + 7.35*320*50=1494.255 + 1495.327103 +117600=120589.582=120590Now, the total annual cost at the lot size of 5000 baseballsCQ = (Q/2)* H + (D/Q) *S + PDC5000 = (5000/2)* 0.38* 6.60 + (320*50)/5000 *100 + 6.60*320*50= 6270 + 320 + 105600=112190Thus, Team should buy 5000 baseballs/orderIf it buys 15000 baseballs or more, price drops to $6.35/unit. Should we revise the order?Calculate EOQ at lowest price of $6.35/unitEOQ= (2DS/H)1/2 EOQ6.35 = (2*320*50*100/0.38*6.35)1/2=1151.58=1152Not feasible as 1152 units corresponds to price of $ 7.35/unitWe can find whether total cost can be reduced by purchasing 15000 baseballs that corresponds to lowest per unit cost.CQ = (Q/2)* H + (D/Q) *S + PDC15000 = (15000/2)* 0.38* 6.35 + (320*50)/15000 *100 + 6.35*320*50=18097.5 +106.66 + 101600=119804.16=119804Comparing this result to optimal result we obtained in (a)i.e 112190 concludes that team should buy 5000 baseballs/order Chapter 11 –Location1.Factor Score for Each LocationFactorWeightABCD1. Labor climate524352. Quality of Life3033443. Transportation systems522154. Proximity to markets2514435. Proximity to materials555326. Taxes1551227. Utilities151413
Continue for 6 more pages »
Read full document
Download as (for upgraded members)
Citation Generator
MLA 7
CHICAGO
(2016, 11). Operations Management Capacity Cushion. EssaysForStudent.com. Retrieved 11, 2016, from
“Operations Management Capacity Cushion” EssaysForStudent.com. 11 2016. 2016. 11 2016 <
"Operations Management Capacity Cushion." EssaysForStudent.com. EssaysForStudent.com, 11 2016. Web. 11 2016. <
"Operations Management Capacity Cushion." EssaysForStudent.com. 11, 2016. Accessed 11, 2016.
Essay Preview
By: studentMBA
Submitted: November 13, 2016
Essay Length: 1,511 Words / 7 Pages
Paper type: Business Plan Views: 376
Report this essay
Tweet
Related Essays
Kudler Operations Management
Operations Management In today’s market companies are searching for a competitive edge. Society today consumers are asking for healthier, more environmentally friendly foods. Kudler Fine
978 Words | 4 Pages
Operations Management Principles Db 5
This was an A paper Unit 5 DB Supply, chain, and location The most important element of Goldratt’s Theory of Constraints is that the throughput
490 Words | 2 Pages
Report on Operations Management
Report on operations management Foreign Affairs Division Changchun University of Technology Summary Operations management deals with the production of services and goods in our daily
3,572 Words | 15 Pages
Mba 502 - Kudler Fine Foods Operations Management
Running head: Operations Management Operations Management MBA/502 Managing the Business Enterprise Operations Management Kudler Fine Foods is a store unlike any in the grocery industry.
977 Words | 4 Pages
Similar Topics
Netflix Operations Management Report
Operations Management Definition Paper
Get Access to 89,000+ Essays and Term Papers
Join 209,000+ Other Students
High Quality Essays and Documents
Sign up
© 2008–2020 EssaysForStudent.comFree Essays, Book Reports, Term Papers and Research Papers
Essays
Sign up
Sign in
Contact us
Site Map
Privacy Policy
Terms of Service
Facebook
Twitter