Resolvedinventoryissues

Sent byDavidAndrés Sanga Tito

PROBLEM 1
Cada año la Samltown Optometry Clinic Vende 10,000 armazones para lentes la clínica pide las armazones a un
regional supplier, thatcopper14 dollars per frame. Each order incurs ancostof 50 dollars.
Theopticsbelieve that itdemandof frames can accumulate and the cost of lacking a frame during a
year is 15 dollars due to the loss ofbusinessfutures. The annual cost of maintaining ainventoryIt is 30 cents
per dollar ofvalueof the inventory. What is the optimal order quantity? What is thescarcitymaximum that will be presented?
What is the maximum level of inventory that will be presented?
Solution:
Step 1: Identify Model
Economic Size of lot replenishment with allowed shortages(modelwith scarcity
Step 2: I determine the costs
Inventory price = $15 per frame
C3=$50 per order
C2=$15 unidad/año
C1=$0.30 per dollar of inventory value
Then the cost 1 corresponds to A
$30 --------- $1
x ----------- $15
$0.30/$1 * $15 = $4.50 or simply
C1=0.30 * inventory value = 0.30(15) = $4.50
Therefore C1=$4.50
The demand is for 10,000 frames per year.
Step 3: Introducedatain the formulas
For Q* (optimal order quantity)

What is the maximum inventory level?

What is the maximum shortage that will occur?

This can be solved in 2 ways
Form 1:
Maximum deficiency = Q* - S* = 573.48 - 413.45 = 124.03 frames
Or well
Form 2:

Step 4: Conclusion
Then the maximum shortfall that will occur will be 124.03 frames and each order must be 537 or 538 frames.
There will be a maximum stock level of 413.45 frames.
PROBLEM 2. Volume discounts
Purchase of floppy disks.A companyaccounting office in Guatemalaask for boxes of 10 diskettes to awarehousein the
City. ThepriceThe warehouse charges per box depend on the number of boxes purchased (see table).The
companyaccountants use 10,000 floppy disks per year. The cost of placing an order is 100 dollars. The only cost
ofstorageit is the opportunity cost ofcapitalwhich is supposed to be 20% per year. P1=50 dollars, P2=40 dollars,
P3=48.50 dollars
Number of boxes ordered (q) Price per box (dollars)
 0£ q<100 50.00
100£ q<300 49.00
q³ 300 48.50
Each time a floppy disk order is placed, how many boxes should be ordered? How many orders are made per year?
What is the total annual cost to meet the demand for floppy disks?companyof accountants?
Solution:
Demand = 10,000 floppy disks per year, but thepricesthey are by the box and we know that a box contains 10 disks so
the demand is for 1,000 boxes per year.
1,000 boxes/year
Order cost =C3=$100
Storage cost = C1 = 0.20 of the inventory value
C1=0.20Px : Px=P1, P2, P3...Pn
Typically, the cost of storing in this model is given as a percentage of the inventory since the price varies accordingly.
to the requested amount.

Having these optimal Q* values, I check if they fall within the range of the table.
Q1*=141.42 0£ q<100 X Does not comply
Q2*=142.86 100£ q<300 / If it meets
Q3*=143.59 q³ 300 / If it meets and New Q*3=300
Why does it satisfy Q*3 and not Q*1?
In Q*1 I cannot have less than what I need, for example, I cannot ask for 100 since I would be short 42, unlike Q*3.
where I can request more than 143 and I request 300 since it is the minimum allowed by that price and the new Q*3 would be 300.
I find the Total Costs:

Cost 1 was valued since Q* does not meet the requirements.

Conclusión:
Lower annual cost is incurred by making an optimal order of 300 boxes, with a cost of $50,288.33/year.
1,000/300=3.33 » 4 times a year to meet demand.
PROBLEM 3. Production
A great producer ofmedicinefor the nerves it produces its supplies in shipments, the preparation cost for each
the refund is $750.production48 gallons are obtained daily from theproductand it costs $0.05 each for
keep them in stock. The constant demand is 600 gallons per month. Assume 12 months, 300 days a year and 25
days per month. Find the optimal production amount, thetimeof optimal cycle, the maximum existence, the duration in
days of each production shipment and the optimal total cost.
Solution:
Economic batch size, production cycle, no shortages allowed.
C3= Costo de producción = $750
C1= Costo de almacenamiento = $0.05 /mes
K = production rate = 48 gal/day x 25 days = 1,200 gallons / month
r = demand = 600 gal/month

It could be worked in days/months/years/weeks etc. and Q* always has to give the same, as long as it
use the same units.
I seek maximum existence
Production Q*/K = 6,000 gal/1,200 gal/month = 5 months
Tciclo = Q*/r = 6,000ga/600 gal/month = 10 months
Production = 5/10 = 0.5 of the time 0.5(300) = 150 days/year

Either of the 2 formulas can be used and it gives the same result for Q*.

PROBLEM 4. With scarcity

An industrial cleaning company has estimated an annual demand of 50,000 gloves, it is estimated that there is a cost
Due to a break or scarcity of Q0.30 unit/month, the way to schedule production batches should be analyzed if desired.
use theresourcesminimizing [Link] cost of maintaining the inventory is Q0.20 per unit/month, the cost of issuing
A lot is Q150.00. What should it be?politicsfrom the following company and the maximum deficiency that will be presented.
Solution:
Economic size of the replenishment lot with allowed shortages.
r= demanda = 50,000/año
C2 = scarcity cost Q0.30 unit/month x 12 months = Q3.60 unit/year
C1 = inventory cost = Q0.20 per unit/month x 12 months = Q2.40 per unit/year
C3= costo de ordenar = Q150.00
Note that the storage cost (C1) is given directly as a fixed value. (in this problem)

D*=Q*-S* : D*= carencia máxima

Conclusion: The company should order 3,227 or 3,228 units each time it places an order. Its maximum shortage will be
of 1,291 units.
PROBLEM 5. Production with scarcity
A construction company must supply itself with 150 sacks ofcementper day, the production capacity of the machine in the
the company is 250 bags per day, a cost of $400.00 is incurred each time a production run is made, the
the storage cost is $0.5 per unit per day, and when it is neededraw materialthere is a loss of $0.7 unit
por día. a) Cuál sería la cantidad optima a pedir. b) La escasez máxima que se presenta.
Solution:
Economic lot size, production cycle, allowed shortages.
r = 150 bags/day
k = 250 bags/day
C3=$400
C1=$0.5 /día
C2=$0.7 /day

a)

b)
Conclusion: The optimal amount to produce would be 1,014 or 1,015 bags per batch, presenting a maximum shortage.
of 169 sacks.
PROBLEM 6. Discounts forvolumevs production
A company ofcomputer sciencededicates to thesaleofcomputers,try to determine how to minimize costs
annual related to the purchase ofcardsofvideofor the computers, each time an order is placed, it
incurs a cost of $20. The price forvideo carddepends on the number of cards ordered according to the following table
No. de tarjetas pedidas de video Precio por tarjetas de video
Q<300 $10
300£ q<500 $9.80
Q³ 500 $9.70
The annual storage cost is 20% of the value of the inventory. Every month, the consulting company employs
80video cards.
ON THE OTHER HAND, the computer company is thinking of producing video cards like other components that
the factory. It employs an employee who works 4 hours and earns $3/hour and a secretary to make the calls which
Work 1 hour and earn $3/hour plus a machine downtime valued at $20.
The cost of storing the cards is $1.95/year, the company can produce at a rate of 100 video cards per month.
and the price of each produced card comes to $9.85.
You are hired as an Engineer to determine what is the best decision that minimizes costs for the
company. Should the company buy the cards or produce them?
Solution:
I analyze volume discounts
C3=$20 (costo por ordenar)
C1 = 0.20 * inventory value = 0.20p / year p: price
r = 80 cards/year = 960 cards/year

I look at Q* if they are in the range and if they are valid or not.
Q*1= 138.56 < 300 SI Q1*=138.56
Q*2= 300 £ 139.97 < 500 NO but I meet the 139.97 regardless of whether there is surplus and Q2*=300 (new)
Q*3= 140.69 ³ 500 NO also meets the requirements and the New Q*3=500
Therefore, the three Q* are valid in the following way
Q*1=138.56 Q*2=300 Q*3=500
I obtain total costs

Therefore, for the volume discount part, it is advisable to order 300 cards each time.
What is requested from the provider with an annual cost of $9,766
Analysis for the production part
C1=$1.95 /year (storage cost)
r = 960/year (demand)
k = 100/ month = 1200 /year (production rate)
C3 = ordering cost, in this case the cost of production
4 hours 1 employee and earns $3/hour = $12
1 hour 1 secretary $3/hour = $3
Dead time = $20
Total $35
Cost of production = C3 = $35 per run
p= $9.85 (precio de tarjeta)
Conclusion:
By producing the product, the company will incur a lower expense. The amount spent on discounts for
volume would be $9,766/year and when produced it would be $9,617.89 and there would be a reduction in
$148.11/year. Therefore, this company should produce the video cards.
PROBLEM 7. Economic size without shortages.
A company currently supplies itself with a certain product by requesting a sufficient amount.
to meet the demand for one month. The annual demand for the item is 1500 units. It
it is estimated that each time an order is placed, a cost of $20 is incurred. the cost of
Unit inventory storage per month is $2 and shortages are not allowed.
a. Determine the optimal order quantity and the time between orders
b. Determine the cost difference ofinventoriesannual between the optimal policy and the current policy of requesting
a supply of one month 12 times a year.
Solution:
r = 1500 units/year
C3 =$20
$2 per unit/month = $24 per unit/year

T=Q*/r = 50/1500 = 1/30 year x 360 days/year = 12 days

Current policy expires every month, that is, 1/12 of a year.
1/12=Q*/1500 Q*=125 (current policy)

Optimal Policy
Q* = 50

Difference of $540 therefore it is now more when the optimal policy exists.
PROBLEM 8. Economic order size, instant replenishment without stockouts
A hardware store has to supply itsclientswith 30 sacks of cement to its customers with 30 sacks of cement
diaries being this a known demand. If the hardware store fails to deliver the product, it definitely loses the
business, to prevent this from happening, it is assumed that there will be no scarcity. The storage cost per unit of time
es de Q0.35 unidad al mes y el costo por hacer el pedido es de Q55.00 a) Cuál es la cantidad optima a pedir b)El
exhaustion period (assume 1 month = 30 days, 1 year = 360 days)
Solution:
r = 30 sacos / día C1= 0.35 unidad / mes
r = 900 bags / month C3= Q55

óT=531.84/30 = 17.73 days

PROBLEM 9
A Mercedes Benz agent must pay $20,000 for each car they purchase. The annual storage cost
It is calculated at 25% of the inventory value. The agent sells an average of 500 cars per year. He believes that the
demand is accumulating, but estimates that if it lacks a car for a year, it will lose future profits by
$20,000. Every time you place a car order, your costs total $10,000. a) Determine the optimal policy of
Agent orders b) What is the maximum scarcity that will occur?
p = $20,000 p: precio
C1=0.25xvalor del inventario = 0.25p C1=0.25(20,000)=$5,000
$20,000 / year
C3=$10,000
r = 500 / year
 maximum deficiency

maximum inventory level

orders = 500/50 = 10 orders per year.
CT= Costo de almacenar + Costo de ordenar + Costo de escasez

PROBLEM 10. Volume discounts vs production

A marine supplies dealer purchases tanks fromgasto a manufacturer, the manufacturer offers a 5% discount on
Orders of 15 or more and a 10% discount on orders of 100 or more. The distributor estimates their ordering costs at
$5 per order and conservation costs at 10% of the product price, the distributor purchases 300 tanks per year.
determine the purchase volume that minimizes total cost, the unit price of each tank is $12.
Solution:
Precio Unitario Cantidad
12 0<q<15
11.40 15£ q<100
10.80 q³ 100
C3= $5
C1=0.10p units/year
C2= does not exist

Invalid X

acceptable

acceptable but with new Q*3=100

3CT1= X not admissible

the best is 3 because it has lower cost Q* = 100 marine items CT=3,309 /year.
If a comparison were to be made between 2modelsthe previous one and one that produces 450 per year at a cost of $6 each
running and the cost of storing outside $1.15/year, the price of $11.70 per unit and the same demand as before.
Which option would be better, to produce or to buy?
Solution:
C3=$6 precio = $11.70 K = 450/año
C1=$1.15 /año r = 300/año

Conclusion:
Therefore, it would be better to buy since producing costs more.