M451 Supply Chain Management- Tutorial 1 Basic EOQ Model, Non-zero Lead Time and Discounts Each month, a gas station sells 4000 gallons of gasoline. Each time the parent company refills the station’s tanks, it charges the station £50 plus £0.7 per gallon. The annual cost of holding a gallon of gasoline is £0.3.What is the minimum quantity of gasoline that the station should order to minimise the total inventory cost?How many orders should be placed each year and when the gas station should place the orders?If the lead time is two weeks, what is the reorder point? A childcare products company has an annual customer demand for 15000 nappies. The fixed ordering cost from a third party supplier is £50 per order and the purchase cost is £0.12 per nappy. The annual holding cost is estimated at £0.04 per nappy per year.Determine the minimum quantity order.How often should the nappies be ordered?If the nappies are currently being ordered every 2 months, what are the cost savings of moving to an EOQ model? Customers at an office supply store demand an average of 6000 desks per year. Each time an order is placed, an ordering cost of £300 is incurred. The annual holding cost is estimated at 25% of the unit price. The purchase price of a desk is £200. One week elapses between the placement and arrival of an order.Each time an order is placed, find the minimum number of desks to order to minimise the total inventory cost?How many orders should be placed each year?Determine the re-order point.Assuming the lead-time increases to five weeks. What is the new re-order point? The Wizard computers Inc. purchases 5000 hard drivers per year for use on its computers. Each order costs £70. The inventory holding cost is 25% of the unit price. The supplier has provided the following price list: Order quantityPrice/unit (£)1-49950.00500-64945.00650 +42.50 What is the minimum order quantity that should be ordered to minimise total inventory cost? A camera store sells an average of 100 cameras per month. The cost of holding a camera in inventory for a year is 30% of the price of the camera. It costs £120 each time the camera store places an order with its supplier. The price charged per camera depends on the number of cameras ordered (see table below). Find the minimum quantity order to minimise total inventory cost. Order SizePrice/camera (£)1-1010.0011- 409.0041-1007.00More than 1005.50

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