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Assignment 4

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shubhangshukla001
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Department of Mathematics

Operations Research (BMA-341/342) /Assignment -4


III -B.Tech. - ME/CS (Session - 2021-22)
Topic- Replacement Problems/Inventory Models (OR)
UNIT-IV

1. Describe the systematic approach to the equipment replacement programme. State the
advantages of sound equipment replacement programme.
2. Define inventory. What are the various types of inventory? Why they are maintained?
3. Describe various inventory models. Explain briefly the following terms:
(i) Purchase cost (ii) Ordering cost (iii) Inventory carrying cost (iv) Shortage cost
4. Derive a formula for economic order quantity (EOQ) for an inventory model with
uniform demand.

5. The annual demand of an item is 3200 units. The unit cost is Rs.6 and inventory carrying
charges 25% per annum. If the cost of one procurement is Rs. 150, determine:
(i) EOQ (ii) number of orders per year (iii) time between two consecutive orders (iv)
the optimal cost.

6. Describe the following replacement policies,


(i) Replacement policy for items when money value remains constant.
(ii) Replacement policy for items when money value changes with constant rate during
the period.

7. The demand for an item is deterministic and constant over time and it is equal to 600
units per year. The per unit cost of the item is Rs. 50 while the cost of placing an order is
Rs.5. The inventory carrying cost is 20% of the cost of inventory per annum and the cost
of shortage is Rs.1per unit per month. Find the optimal ordering quantity and when stock
outs are permitted. If the stock outs are not permitted, what would be the loss to the
company?

8. A machine owner finds from his past records that the cost per year of maintaining a
machine whose purchase price is Rs. 6000 are given below,
Year 1 2 3 4 5 6 7 8
Maintenance 1000 1200 1400 1800 2300 2800 3400 4000
Cost
Resale 3000 1500 750 375 200 200 200 200
Price
Determine at what age a replacement is due.

9. A company has a demand of 12000 units/year for an item and it can produce 2000 such
items per month. The cost of one setup is Rs. 400 and the holding cost/unit/month is
Rs.0.15. Find the optimum lot size and the total cost per year, assuming the cost of 1 unit
as Rs.4. Also find the maximum inventory, manufacturing time and total time.
10. (i) Machine A costs Rs. 9000. Annual operating costs are Rs. 200 for the first year, and
then increases by Rs. 2000 every year. Determine the best age to replace the machine. If
the optimum replacement policy is followed, what will be the average yearly cost of
owning and operating the machine?
(ii) Machine B costs Rs. 10000. Annual operating costs are Rs. 400 for the first year and
then increases by Rs.800 every year. You now have a machine of type A which is one year
old. Should you replace it with B, if so when ?

11. Write short notes on


(i) Individual replacement
(ii) Group replacement
(iii) Deteriorating items and sudden failure items
(iv) MAPI method
12. Determine the optimal replacement policy for the data given below,
(i) Group replacement cost Rs. 20 per unit
(ii) Cost of individual replacement of failure = Rs. 90 per unit
(iii) Total number of units in a system = 1000 units.
(iv) Mortality data of units to be used in the system

Interval of time period (hours) Probability of failure


0 - 200 0.00
200.01 - 400 0.06
400.01 - 600 0.30
600.01 - 800 0.48
800.01 - 1000 0.16
13. A computer contains 10000 resisters. When any resister fails, it is replaced. The cost of
replacing a resister individually is Rs. 1 only. If all the resisters are replaced at the same
time, the cost per resister would be reduced to 35 paise. The percent surviving at the end
of month 't' is given below,
Month→ 0 1 2 3 4 5 6
% surviving at the 100 97 90 70 30 15 0
End of the month (St)
What is the optimum replacement plan?

14. A company requires 16000 units of raw material costing Rs. 2 per unit. The cost of
placing an order is Rs.45 and the carrying costs are 10% per year per unit of the average
inventory. determine,
(i) the economic order quantity
(ii) cycle time
(iii) total variable cost of managing the inventory.
15. With the help of a diagram, explain the following terms:
(i) Order quantity (ii) Lead time (iii) Safety stock (iv) Re-order point

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