Nama : I Made Wiratha Nungrat NIM : 13209057

Homework 4
Problem 4.7 Stationery Supplies orders plastic eraser from a company from Germany. It takes six week to ship the erasers to Utah. Stationery Supplies maintain a standing order of 200 erasers every six months (shipped on the first of January and the first of July) a. What is the annual demand of erasers? Answer: From the problem we know that the company maintain a standing order of 200 pieces/6 months without specify the other information, so the annual demand is: = = 200 2 = b. Draw a graph of pipeline ordered inventory, what the average pipeline inventory of erasers during a year? Answer:
200 6 Months

100
Reorder Point R = 46.15

6 Weeks

Average pipeline Inventory

1
6

6
6

7
6

12

Figure 1. Pipeline of ordered inventory

The average pipeline inventory of erasers during a year is : = 1 = 1.200 12

= c. Express the replenishment in lead time and multiply the annual demand by the lead time, what do you notice? Answer: Lead time = 6 Weeks = 0,115 Year Lead time multiply by the annual demand is:

= 0,115 400 = , We notice that lead time multiply by the annual demand is reorder point R, or = . Problem 4.14 A local machine shop buys hex nuts and molly screw from the same supplier. The hex nuts cost 15 cents each and the molly screw cost 38 cents each. A setup cost of $100 is assumed for all orders. Holding cost are based on a 25 percent annual interest rate. The shop uses an average of 20.000 hex nut and 14.000 molly screws annually. a. Determine the optimal size of the orders of hex nuts and molly screws, and the optimal time between placements of orders of these two items. Answer: First Scheme: If these item are ordered separately - Hex nut price = 15 cents - Molly Screws = 38 cents - Setup cost (K) = $100 - Holding cost (h) =25% annual interest rate 2. . = Q is known as the economic order quantity Part A: Hex nut Optimal size - Annual demand, =20.000 pcs/year - Holding cost, h = $100 - Annual interes rate = 25% 2.100.20.000 = 0.25 = . Optimal Time = =

4.000 20.000

= , = ,

Average Annual Holding Cost, = ( ) 2 4.000 = 0,25 ( ) 2 = $500 Average annual setup cost, = = .

100 20.000 4.000 = $500

Part B :Molly Screws Optimal size Annual demand, =14.000 pcs/year Holding cost, h = $100 Annual interest rate = 25% 2.100.14.000 = 0.25 = 3.346,6 Optimal Time = =

3.346,6 14.000

= 0,24 = 2,86 Average Annual Holding Cost, = ( ) 2 3.346.6 = 0,25 ( ) 2 = $,

Average annual setup cost, = = .

100 14.000 3346,6 = $,

b. If both item are ordered and receive simultaneously, compare to the problem above. Answer: Optimal size a. Annual demand, =20.000 + 14.000 pcs/year b. Holding cost, h = $100 c. Annual interest rate = 25% 2.100.34.000 = 0.25 = 5215,36 Average Annual Holding Cost, = ( ) 2 5215,36 = 0,25 ( ) 2 = $651,92 Average annual setup cost, = = .

100 34.000 5.215,36 = $651,92

Comparison of separately and simultaneously orders cost: Annual cost of holding Separately order = $500+$418,32 = $918,32 Simultaneously order = $651 Annual cost of setup Separately order = $500+$418,32 = $918,32 Simultaneously order = $651 From result above we can conclude that order the material simultaneously of nut and screw give us more cheap solution than order separately.

Problem 4.22 A Purchasing agent for a particular type of silicon wafer used in the production of semiconductor must decide among three sources. Source A will sell the silicon wafers for $2,5 per wafer, independently of the number of wafer ordered. Source B will sell the wafers for $2,4 for an order for not fewer than 3000 pcs, Source C will sell the wafers for $2,3 each but not accept an order below 4000 pcs. Assume the setup cost $100, and annual demand of 20.000 wafers. Assume holding cost of 20 percent annual interest. a. Which source should be used, what is the size of the standing order? Answer: Annual demand, = 20.000 wafers 2,5 () = {2,4 2,3 0 < 3.000 3.000 < 4.000 4.000

Setup cost, K = $100 Holding cost, h = 20% annual interest rate 0 = 2,5, 1 = 2,4, 2 = 2,3 The first step is to compute the EOQ values corresponding to each of the unit cost, (0) = 2. . . 0

2 100 20.000 = 0,2 2,5 = 2.828,42 = 2.829 (1) = 2. . . 0

2 100 20.000 = 0,2 2,4 = 2.886,75 = 2.887 (2) = 2. . . 0

2 100 20.000 = 0,2 2,3 = 2.948,83

= 2.949 We say the EOQ value is realizable if it falls within the interval that corresponds to the unit cost used to compute it. Since 0 2829 < 3.000, (0)is realizable. There are three candidates for the optimal solution: 2.829, 3.000, and 4.000. The average annual cost functions are given by: () = + + 2 = 0,1, 2

0 () 0 < 3.000 () = {1 () 3.000 < 4.000 2 () 4.000 Substituting Q equals 2.829, 3.000, and 4.000, and using the appropriate values of , we obtain (2.829) = 0 100 2829 = (20.000)(2,5) + (20.000 ) + (0,2 2,5 ) 2829 2 = $ 51.414, 2 (3.000) = 1 100 3.000 = (20.000)(2,4) + (20.000 ) + (0,2 2,4 ) 3.000 2 = $ 49.386,6 (4.000) = 2 100 4.000 = (20.000)(2,3) + (20.000 ) + (0,2 2,3 ) 4.000 2 = $ 47.420 Hence, we conclude that the optimal solution is to place a standing order for 4.000 wafers at an average annual cost of $ 47.420. So Source C give us the best option. b. What is the optimal value of holding and setup cost for wafers when the optimal source is used? Answer: Optimal holding cost= ( 2 )

4.000 = 0,2 ( ) 2 = $

Optimal Setup cost =

100 20.000 4.000 = $

c. Determie the reorder point R, if the replenishment time is 3 months Answer: , = 4.000 = 20.000 = 0,2 = 2,4 , = 3 Lead time exceeds a cycles. So we must forming the ratio = 3 = 2,4 = , This means that there are exactly 1,25 cycles in the lead time. Every order must be placed 1,25 cycles in advance. For the purpose of computing the reorder point, this is exactly the same as placing the order 0,25 cycle in advance. In this case 0,25 cycle is 0,05 Year. So the reorder point is : = . = 20.000 0.05 = We conclude that, if the inventory stock is reaching 1000 wafers, the foundry must reorder the wafer from source C.