San Diego State University Operations And Supply Chain Management Assignment Help - Order by

Question - 4. Westside Auto purchases a component used in the manufacture of automobile generators directly from the
supplier. Westside’s generator production operation, which is operated at a constant rate, will require 1000
components per month throughout the year (12,000 units annually). Assume that the ordering costs are $25 per
order, the unit cost is $2.50 per com- ponent, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year and a lead time of 5 days. Answer the following inventory policy
questions: a.
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4. Westside Auto purchases a component used in the manufacture of automobile generators directly from the
supplier. Westside’s generator production operati ...Read More on, which is operated at a constant rate, will require 1000
components per month throughout the year (12,000 units annually). Assume that the ordering costs are $25 per
order, the unit cost is $2.50 per com- ponent, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year and a lead time of 5 days. Answer the following inventory policy
questions: a. What is the EOQ for this component? b. What is the reorder point? c. What is the cycle time? d.
What are the total annual holding and ordering costs associated with your recom- mended EOQ? Answer: 4. a.
b. c. d. Holding Ordering Total Cost = $547.72 5. Suppose that Westside’s management in Problem 4 likes the
operational ef?ciency of or- dering once each month and in quantities of 1000 units. How much more expensive
would this policy be than your EOQ recommendation? Would you recommend in favor of the 1000-unit order
quantity? Explain. What would the reorder point be if the 1000-unit quan- tity were acceptable? ...Read Less

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