week 3 assignment 052818
Using the appropriate tools and given information (e.g., formulas, Excel, etc.) complete the parts for the two problems below. The answers can be included in the same document as the calculations. APA formatting is not required.
3A – The following table contains figures on the monthly volume and unit costs for a random sample of 16 items from a list of 2,000 inventory items at a health care facility.
- Develop an A-B-C classification for these items.
Item |
Unit Cost |
Usage |
Item |
Unit Cost |
Usage |
K34 |
$10 |
200 |
F99 |
$20 |
60 |
K35 |
25 |
600 |
D45 |
10 |
550 |
K36 |
36 |
150 |
D48 |
12 |
90 |
M10 |
16 |
25 |
D52 |
15 |
110 |
M20 |
20 |
80 |
D57 |
40 |
120 |
Z45 |
80 |
200 |
N08 |
30 |
40 |
F14 |
20 |
300 |
P05 |
16 |
500 |
F95 |
30 |
800 |
P09 |
10 |
30 |
- Given the monthly usages in the following table, classify the items in A, B, and C categories according to dollar usage.
Item |
Usage |
Unit Cost |
4021 |
90 |
$1,400 |
9402 |
300 |
12 |
4066 |
30 |
700 |
6500 |
150 |
20 |
9280 |
10 |
1,020 |
4050 |
80 |
140 |
6850 |
2,000 |
10 |
3010 |
400 |
20 |
4400 |
5,000 |
5 |
- Determine the percentage of items in each category and the annual dollar value for each category for part B.
3B – A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags per year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag.
- Determine the economic order quantity.
- What is the average number of bags on hand?
- How many orders per year will there be?
- Compute the total cost of ordering and carrying flour.
- If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?