Purchase Solution

Inventory Control Models

Not what you're looking for?

Ask Custom Question

Demand for product is 100,000 per year, cost is $10 per order. Carryover cost per item year is 1/2 cent. Demand is constant, how much product should be ordered at a time to minimize the inventory costs?

How many orders per year should be placed and what would the annual ordering cost be?
What would the average inventory be and what would annual holding cost be?

Purchase this Solution
Solution Summary

This solution is comprised of detailed step-by-step calculation of the given problem and provides students with a clear perspective of the underlying concepts.

Solution Preview

Thanks for using Brainmass.

Problem: Demand for product is 100,000 per year; cost is $10 per order. Carryover cost per item year is 1/2 cent. Demand is constant, how much product should be ordered at a time to minimize the inventory costs

How many orders per year should be placed and what would the annual ordering cost ...

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

View More Free Quizzes
Related BrainMass Solutions

  • Forecasting & Inventory Model

    An essential part of cost control in any healthcare organization is staffing levels, maintaining the right mix of professional individuals at any given time. Inventory and production control models are designed for static environments.

  • Discussion Question-Research inventory management

    What can happen with inventory planning and control is that there simply might not be enough products in stock to meet customer demands. Think of Christmas and how many stores run out of products. This is due to poor inventory planning.

  • Inventory problems

    130703 Inventory Control Models /Linear Programming Models QUESTIONS Inventory Control Models 1.

  • Procter & Gamble Inventory Management System

    Its modeling and decision support group was asked to create global inventory models. P&G has needed "scientific" models to help it control its inventory since the mid-1980s when it implemented Distribution Requirements Planning (DRP).

  • management

    It is basically software based production setting up and inventory control scheme, which is used for the direct manufacturing processes.

  • Operation Management

    Manpower planning, acquisition, and control c. Scheduling d. Managing for quality e. Material control (inventory, supplies, etc.) f. Cost control g. Training and development for employees h.

  • Definitions of various aspects of an inventory model

    I recommend following books Manufacturing planning and control by Vollman, Berry and Whybark Decision models in inventory by Whitin Production and operations management: a strategy perspective by Ritzman and Krawjeski The solution response discusses

  • Simulation: Monte Carlo Model

    Simulation can not only be applied to certain phases of inventory, such as setting reorder points and determining usage during the reorder point, but also can be applied to integrating production scheduling models and inventory control models for a combined

  • Competing on Analytics

    For example, Dell, Wal-Mart and Amazon make use of supply chain optimization models, inventory models and waiting line models to integrate their supply chain with that of their suppliers and customers.

View More Related Solutions