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D D / Number of Working Days in A Year 10,000 / 300 33.33 Units Per Day

The document contains three sections with procurement and inventory related questions: 1) SleepWell manufactures mattresses using 8 springs per mattress. They need to determine the optimal order quantity of springs to minimize total costs given an annual demand of 20,000 mattresses and ordering and holding costs. 2) Meyer's Stationery has an annual demand of 10,000 notebook binders and operates 300 days per year. Supplier deliveries take 5 days. The reorder point needs to be calculated. 3) Estimates are provided for procuring an item with annual demand of 3,600 units and costs for procurement and inventory holding. The optimal option between procuring all at once or 15 units daily needs to be

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2K views

D D / Number of Working Days in A Year 10,000 / 300 33.33 Units Per Day

The document contains three sections with procurement and inventory related questions: 1) SleepWell manufactures mattresses using 8 springs per mattress. They need to determine the optimal order quantity of springs to minimize total costs given an annual demand of 20,000 mattresses and ordering and holding costs. 2) Meyer's Stationery has an annual demand of 10,000 notebook binders and operates 300 days per year. Supplier deliveries take 5 days. The reorder point needs to be calculated. 3) Estimates are provided for procuring an item with annual demand of 3,600 units and costs for procurement and inventory holding. The optimal option between procuring all at once or 15 units daily needs to be

Uploaded by

michaelabatralo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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A. (2 items) SleepWell Mattresses manufactures high-quality spring-based cotton mattresses.

A set of
eight
(8) identical stainless-steel springs are used to produce a mattress. The inventory holding cost for
springs is ₱2.15 per spring per year. SleepWell has an estimated annual demand for 20,000
mattresses. Determine the quantity of springs SleepWell should procure to minimize the 𝑇𝑇𝑇𝑇 for
springs if the ordering cost per order is ₱50? Also, compute the average inventory level.

B. (1 item) The annual demand for notebook binders at Meyer’s Stationery Shop is 10,000 units. Brad
Meyer operates his business 300 days per year and finds that deliveries from his supplier
generally take five (5) working days. Calculate the reorder point for the notebook binders.

Since the annual demand is 10,000 units , and the Brand Meyer operates his business 300 days a year, the daily
demand will be:

D = D / Number of working days in a year


= 10,000 / 300
= 33.33 units per day

R=DxL
= 33.33 x 5
= 166.6 round off 167 units.

C. (5 items) You have developed the following estimates for procuring an item for your
manufacturing operations:
𝐷𝐷 is 3,600 units yearly (10 units per day)
𝑃𝑃 is ₱25 per item
𝑆𝑆 is ₱35 per order
𝑖𝑖 is 25% annually

The following two (2) options are available for you:


Option 1: the supplier can supply all items at
once. Option 2: The supplier can supply 15
items per day.
Based on the information you have, which of the above options would you prefer?

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