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Question: One of the products sold by OfficeMax is a Hewlett-Packard LaserJet Z99 printer. As purchasing manager, you have the following information for the printer: Click the icon to view the information for the printer. a. The EOQ is 22. (Enter your response rounded to the nearest whole number.) b. The annual ordering costs and holding costs (ignoring safety stock) for the EOQ is S 889. Enter your response rounded to the nearest dollar) c. Suppose OfficeMax currently orders 100 printers at a time. OfficeMax would pay $ less in holding and ordering costs per year if it ordered just 10 printers at a time. Enter your response rounded to the nearest dollar. More Info Average weekly demand (52 weeks per year): Standard deviation of weekly demand: 95 printers 6 printers Order lead time: 4 weeks Standard deviation of order lead time: Item cost: Cost to place an order: Yearly holding cost per printer: Desired service level during reordering period: 0 (lead times are constant) $100 per printer $2 $40 95% (z= 1.65) Enter your answer in the ans

What is the answer to question C?

Transcribed text From Image: One of the products sold by OfficeMax is a Hewlett-Packard LaserJet Z99 printer. As purchasing manager, you have the following information for the printer: Click the icon to view the information for the printer. a. The EOQ is 22. (Enter your response rounded to the nearest whole number.) b. The annual ordering costs and holding costs (ignoring safety stock) for the EOQ is S 889. Enter your response rounded to the nearest dollar) c. Suppose OfficeMax currently orders 100 printers at a time. OfficeMax would pay $ less in holding and ordering costs per year if it ordered just 10 printers at a time. Enter your response rounded to the nearest dollar. More Info Average weekly demand (52 weeks per year): Standard deviation of weekly demand: 95 printers 6 printers Order lead time: 4 weeks Standard deviation of order lead time: Item cost: Cost to place an order: Yearly holding cost per printer: Desired service level during reordering period: 0 (lead times are constant) $100 per printer $2 $40 95% (z= 1.65) Enter your answer in the ans

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Answer:

Answer

D = Annual Demand = 95 x 52 = 4940
C = Item Cost = $100
h = Annual holding cost for a printer = $40
S = Ordering Cost = $2

EOQ = sqrt(2DS / H) = sqrt(2*4940*2/40) = 22 —————(a)

Total Relevant Cost = (D/Q)*S + Q*H/2 = (4940/22)*2 + 22*40/2 = 889 ——–(b)

For Q=100

Total Relevant Cost = (4940/100)*2 + 100*40/2 = 2099

For Q=10

Total Relevant Cost = (4940/10)*2 + 10*40/2 = 1188

Cost savings = $2099 – $1188 = $911 —————(c)



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