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Inventory Model Questionnaires

The document discusses various inventory costs including holding, ordering, and stockout costs, and provides calculations for minimum total cost order quantity, total cost, and reorder point based on given demand and costs. It also introduces concepts such as the Economic Production Lot Size Model and the importance of safety stock and lead time in inventory management. Additionally, it highlights the need for a probabilistic inventory model to handle unpredictable customer demand.

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Jonna Mae Adlawan Limbaga
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4 views3 pages

Inventory Model Questionnaires

The document discusses various inventory costs including holding, ordering, and stockout costs, and provides calculations for minimum total cost order quantity, total cost, and reorder point based on given demand and costs. It also introduces concepts such as the Economic Production Lot Size Model and the importance of safety stock and lead time in inventory management. Additionally, it highlights the need for a probabilistic inventory model to handle unpredictable customer demand.

Uploaded by

Jonna Mae Adlawan Limbaga
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

GELAN

1. The cost of keeping too much inventory


a. Holding Cost
b. Ordering Cost
c. Stockout Cost
d. Cost

2. The cost of business everytime it placed an order to buy a new inventory.


a. Holding Cost
b. Ordering Cost
c. Stockout Cost
d. Cost

3. The cost of running out inventory


a. Holding Cost
b. Ordering Cost
c. Stockout Cost
d. Cost

JONNA
Given:
Demand/year = 150,000 units
Lead time = 3 days
Operating Days = 300 days
Holding Cost = Php 8.00
Ordering Cost = Php 50.00
Requirement:
Find the Minimum Total Cost Order Quantity, Total Cost, and Reorder Point.
1. Minimum Total Cost Order Quantity
Q*= √2 (150,000) (50)/8
= 1, 369 units

2. Total Cost = 1/2Q (8)+150,000/Q (50)


= 4Q+ 7,500,000/Q
= (1,369)(40) + 7,500,000/1,369
= Php 60, 239

3. Reorder Point = (150,000/300 days) = 500 units per day


= (500 units/day) (3 days)
= 1,500 units

KATE
1. It is a formula that calculates minimum possible cost by summing annual
purchasing, ordering and holding cost
A. Economic Production Lot Size Model
B. Total Cost
C. Average Cost
D. Maximum Inventory

2. It is a model useful for company to know how much to produce and when to
produce
A. Economic Production Lot Size Model
B. Total Cost
C. Average Cost
D. Maximum Inventory
SHARIS

Safety Stock 1. The difference between your target Reorder Point (r) and the
Average Demand

Probabilistic Inventory Model. 2. This model is essential for any business operating
in the real world, where customer demand is always unpredictable.

Lead Time 3. ____ is the time the vendor takes to process, ship, and deliver your
order.

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