Problem #6 Last year, the annual demand for certain piece of merchandise that is

Question

Problem #6 Last year, the annual demand for certain piece of merchandise that is in inventoried at a department store warehouse was 13,688 units. The annual demand is expected to increase!0% in the next year. One unit of the product costs $8.75, and the selling price is $19.95. The holding cost rate is 15%/year. The cost to place an order for the merchandise is figured at $65. (a) Determine the economic order quantity and the total inventory cost for this case. Problem #7 A starting batch of 10,000 parts is processed through 6 sequential operations. Operations 1 and 2 each have a fraction defect rate of 496 , operation 3,4, and 5 each have a fraction defect rate of 696,and operation 6 has a fraction defect rate of 10%. (a) How many good and defects parts are in the final batch? (b) What is the yield of the operation sequence?

Explanation / Answer

Answer:

given data;

now here we need to find the:

1.determine the economic order quantity and the inventory cost for this case:

= SQRT(21505765/(15%8.75)) = 1221 units

Where,

= 0.158.75(1221/2) + 65(15057/1221) = 1602.84

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