The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 60 cars per month. The cars cost $70 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. Required:
a. Determine the economic order quantity and total annual cost under the assumption that no backorders are permitted.
b. Using a $45 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost for the model racing cars.
c. What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop is open for business 300 days per year.
d. Would you recommend a no-backorder or a backorder inventory policy for this product? Explain.

Step-by-step explanation:

A) Demand per month= 40 cars

Annual Demand (D)= 12*40 = 480

Fixed Cost per order (K)= 15

Holding Cost= 20% of cost= 60 *0.2 = 12

a. Economic Order Quantity=

Q^{*}={\sqrt {{\frac {2DK}{h

= √(2*480*15)/12

=34.64 ~ 35

Total Cost =P*D+K(D/EOQ)+h(EOQ/2) P= Cost per unit

= 60*480+ 15(480/35) + 12(35/2)

= 28800+ 205.71+ 210

=$29215.71

B). Backorder Cost (b)= $45

Qbo= Q* × √( b+h/ h)

= 35*√(12+45/ 45)

= 35* 1.12

=39.28 ~ 39

Shortage (S)= Qbo * (K/K+b)

= 39* (15/15+45)

= 39* 0.25

= 9.75

Total Cost Minimum=( bS2/ 2Qbo) + P (Qbo- S)2/2Qbo + K(D/Qbo)

=45* 9.752 / 2* 392 + 60 (39-9.75)2/ 2* 392 + 15 ( 480/39)

= 1.40+ 21.9.+ 184.61

=$207.91

C)Length of backorder days (d) = Demand ÷ amount of working days

d = 480 ÷ 300

d = 1.6

Calculate the backorders as the maximum number of backorders divided by the demand per day

s/d = 9.75/1.6 = 6.09 days (answer)

D) Calculate the difference in total between not using backorder:

$207.85 + $207.85 - 207.91 = $207.79

The saving in using backorder is $207.79.

Therefore I would recommend using a backorder

the length of o'p' is .

step-by-step explanation:

it is given that the quadrilateral m'n'o'p' is the image of quadrilateral mnop after dilation.

the center of dilation is origin and the scale factor is 1.5.

in dilation the image and preimge are similar figures. it means the sides of image and preimage are proportional.

the scale factor is defined as

the scale factor is 1.5.

multiply both sides by op.

note: if the value of op is given, then multiply the value of op with 1.5 to get the length of side o'p'.

therefore length of o'p' is .

3. (5x + 1) - (-10x + 6)

simplify the answer choice. combine like terms. remember to distribute the negative to the terms inside the second parenthesis. also remember that two negatives = one positive, and one of each sign = negative.

- (-10x + 6) = + 10x - 6

simplify. combine like terms:

5x + 1 + 10x - 6

5x + 10x + 1 - 6

15x - 5

∴ it is your answer

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