12.14 Myriah Fitzgibbon, of L.A. Plumbing uses 1,200 of a certain spare part that costs $25 for each order, with an annual holding cost of $24.
a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 1000.
b) Identify the economic order quantity and consider the implications for making an error in calculating economic order quantity.
12.16 Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $30 per order.
a) What is the economic production quantity?
b) How many production runs per year will be made?
c) What will be the maximum inventory level?
d) What percentage of time will the facility be producing components?
e) What is the annual cost of ordering and holding inventory?
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