SOLUTIONS: CHAPTER 13
PROBLEM #1
Item Usage * Cost Category
4021 $70,000 A
4400 35,000 B
6850 30,000
4066 28,000
4050 11,200 C
9280 10,200
3010 8, 000
9402 3,600
6500 3,000
PROBLEM #2
I am assuming that you had no problem with the categorization. For part B, the manager would use the information to allocate control efforts. For part e, the item would be reassigned if there were some other reason other than costs to move the item.
PROBLEM #5
D = pots per month * 12 months per year = 9000 pots per year
Price = $2 per pot
S = $20
P = $50
H = 2 * .30 or $.60 per unit per year
This one is missing some information in the text. Although it gives you the current order quantity it does not ask you to find the EOQ. To find the difference in price, you needed to find the EOQ and then check the difference. You may have had provlems with this one because of this omission.
PROBLEM # 8
EOQ is calculated the same way as in the preceding problem
Current: D/Q = 27000/4000 or 6.76
For D/Q to equal 10 Q must be 2700, so 2700 = the square root of ((2*27000*S)/.18)) . Solving for S you will get S
= $24.30
PROBLEM #11
S = $60
D = 20,000 (250 * 80)
H = $2.00
p = 200
u = 80
Q0 = (the sq root of (2 * D * S)/H) * the square root of (p/p * u)
or (the square root of (2 * 20,000 * 60)/2.00) * the sq root of (200/(200-80)) or 1.414 units
imax = (Q/P)(P-U) OR (1414/200)(200 - 80) = 848 UNITS
lENGTH OF RUN = q/p OR 1414/200 OR 7.07 DAYS
200 - 80 = 120 UNITS PER DAY