# A Company Has an Annual Demand for a Product of 1000 Units, a Carrying Cost of \$20 Per Unit Per Year, and a Setup Cost of \$100. Through a Program of Setup Reduction

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1. What is the objective of marketing? What three ways will help it achieve this objective?
2. For the following data, calculate the number of workers required for level production and the resulting month-end inventories. Each worker can produce 9 units per day, and the desired ending inventory is 800 units. Why is it not possible to reach the ending inventory target
3. What is a scheduled receipt? From where does it originate?
4. What are the two ways of balancing capacity available and load? Which is preferred? Why?
5. A company is negotiating with a potential supplier for the purchase of 10,000 widgets. The company estimates that the supplier’s variable costs are \$5 per unit and that the fixed costs, depreciation, overhead etc., are \$5000. The supplier quotes a price of \$10 per unit. Calculate the estimated average cost per unit. Do you think \$10 is too much to pay? Could the purchasing department negotiate a better price?
6. What action should be taken when unacceptable error is found in tracking a forecast?
7. How do each of the following influence inventory decisions?
a. Lumpy Demand
b. Minimum orders
c. Transportation Costs
d. Multiples
8. Why is stock location important in a warehouse? Name and describe four basic systems of stock location?
9. A company has an annual demand for a product of 1000 units, a carrying cost of \$20 per unit per year, and a setup cost of \$100. Through a program of setup reduction, the setup cost is reduced to \$10. Run costs are \$2 per unit. Calculate:
a. The EOQ (Economic Order Quality) before setup reduction
b. The EOQ (Economic Order Quality) after setup reduction
c. The total and unit cost before and after setup reduction.
10. Why was the third party registration system...