The annual demand for an item is 10,000 units. The cost to process an order is $75 and the annual inventory holding cost is 20% of itemcost.Quantity1-910 - 9991,000 - 4,9995,000 or morePrice$2.95 per unit$2.50 per unit$2.30 per unit$1.85 per unita. What is the optimal order quantity, given the following price breaks for purchasing the item? [Select]b. What price should the firm pay per unit? $ [Select]c. What is the total annual cost at the optimal behavior? $ [Select]d. What is the holding cost based on the optimal behavior? $ [Select ]

As per Bartleby guidelines, we can only solve the first three subparts of one question at a…

Answered: a. What is the optimal order quantity,…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

A company is planning to purchase 10,000 units of a particular item in the year ahead. The item is purchased in boxes each containing 10 units of the item, at a price of €400 per box. The cost of holding an item in inventory for a year (including insurance, interest and space costs) is 10% of the purchase price. The cost of placing and receiving orders is to be estimated from cost data collected relating to similar orders, where costs of €7,000 were incurred on 25 orders. It should be assumed that ordering costs change in proportion to the number of orders placed. 5% should be added to the above ordering costs to allow for inflation. Assume that usage of the item will be even over the year. Required: (a) Calculate the economic order quantity (EOQ) in boxes which minimises total costs (b) Outline when and why it is appropriate to use economic batch quantity (EBQ)
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S= $5/order, and I= 20% of item price. Current price is $19.2 per unit (without any discount). Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Show your work Order Quantity 1 to 50 51 to 100 Price No discount 20% discount 40% discount o, 101 and up What should the order quantity be in order to minimize the total annual cost? Show your work. D-960 S-55 1-20% CURRENT PRICE-19.20
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S= $20/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost?
A manufacturer procures a subassembly from a supplier. The annual demand is 165,000 units, the cost per unit is $5, the inventory-carrying charge is 13 percent, and the order cost is $220. For orders between 10,000 but less than 25,000, a six percent discount is applied, and for orders exceeding 25,000, an eight percent discount is applied. What is the optimal order quantity? Use the Quantity Discount Excel template to find your answer.
A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: Less than 1000 $5.00 each 1000 to 3999 $4.95 each 4000 to 5999 $4.90 each 6000 or more $4.85 each Ordering costs are $50, annual carrying costs per unit are 40 percent of purchase cost, and annual usage is 4900 pulleys. Determine the order quantity that will minimize total cost.
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 10,000 units, S= $75/order and I = 20% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Please answer in excel format
Birka Styles & Co is introducing a new line of beachwear for their retail stores. The manager needs to decide how many lots of the new beachwear to order for their stores. The marketing came up with a payoff table (see below) considering information about the price, projected sales level, and cost of inventory and ordering. DEMAND Order size Low Medium High 1 lot 12,000 15,000 15,000 2 lots 9,000 25,000 35,000 3 lots 6,000 35,000 60,000 The owner wants to use the Hurwicz method and gave the manager a Hurwica alpha (α) of 0.6. How many lots should the manager order?
Birka Styles & Co is introducing a new line of beachwear for their retail stores. The manager needs to decide how many lots of the new beachwear to order for their stores. The marketing came up with a payoff table (see below) considering information about the price, projected sales level, and cost of inventory and ordering. DEMAND Order size Low Medium High 1 lot 12,000 15,000 15,000 2 lots 9,000 25,000 35,000 3 lots 6,000 35,000 60,000 The owner found out that: P(Low demand) = 1/3; P(Med demand) = 1/2; P(High demand) = 1/6. Which of the following decision is NOT true? A)The best decision is to order 3 lots for a payoff of $29,500. The probabilities gave me enough information to perform a Laplace approach. B)The best decision is to order 3 lots for a payoff of $29,500. The probabilities gave me enough information to perform the EMV approach. C)The EVPI is $2,000. D)The EVwPI is $31,500.
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?
Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?
Assume that each unit demanded of a company's product generates 66 USD in revenue and that each unit ordered costs 56 USD. How much will the company gain or lose in a month if it places an order of 439 units and the actual demand for the item is 374 units? Is it a loss or a gain?
The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, Quantity 1 to 49 50 to 249 250 and up Price $5.00/unit $4.50/unit $ 4.10/unit $20/order and 30% of item price, respectively. (a) Assume the discounts applied to all the units in the order, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost. (b) Assume the discounts applied to the units are incremental, what should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS

a. What is the optimal order quantity, given the following price breaks for purchasing the item? [Select] b. What price should the firm pay per unit? $ [Select] c. What is the total annual cost at the optimal behavior? $ [Select]