A bedding store has a steady demand for 300 mattresses each year. The store ordersmattresses from a regional wholesaler at a cost of $50 per order. The cost of each mattressdepends on the order size, and the annual holding cost for mattresses is 5% of the unitcost. The store sells the mattresses for a retail price of $250.a. Use this information to fill in the following table in your answer booklet:DAnnual demandOrder costCoHolding cost ratioISelling price per unit7"Annual revenuerDb. The wholesaler offers the following discounts depending on the order size:Discount category Order sizeDiscountUnit cost C10-490%$200250-995%$1903100 or more10%$180For each discount category,find the holding cost C₁, economic order quantity Qand total annual cost TCTC = = 10 °C ₂ + 2 = C₁ + DCCo+DC. How many mattresses should thestore order at a time to minimise the total annual cost?c. Fill in the following table in your answer booklet based on the economic orderquantity chosen in (b).Economic order quantitygUnit costсCost of holding one unitChAnnual holding cost10°ChOptimal order frequencyoAnnual order costAnnual inventory costTotal annual costAnnual profit- CoQDCTCrD-TC

Annual demand = 300 Order cost = $50 Annual holding cost = 5% of unit cost Retail price = $250

A bedding store has a steady demand for 300 mattresses each year. The store orders mattresses from a regional wholesaler at a cost of $50 per order. The cost of each mattress depends on the order size, and the annual holding cost for mattresses is 5% of the unit cost. The store sells the mattresses for a retail price of $250. a. Use this information to fill in the following table in your answer booklet: Annual demand D Order cost Co Holding cost ratio I Selling price per unit r Annual revenue rD b. The wholesaler offers the following discounts depending on the order size: Discount Unit cost C Discount category Order size 0-49 1 0% $200 2 50-99 5% $190 3 100 or more 10% $180 For each discount category, find the holding cost C₁, economic order quantity Q and total annual cost TC -0°C, +Co+DC. +DC . How many mattresses should the store order at a time to minimise the total annual cost? c. Fill in the following table in your answer booklet based on the economic order quantity chosen in (b). Economic order quantity ė Unit cost C Cost of holding one unit Ch Annual holding cost 10% Optimal order frequency D e Annual order cost Annual inventory cost Total annual cost Annual profit -Co DC TC rD-TC

A bedding store has a steady demand for 300 mattresses each year. The store orders mattresses from a regional wholesaler at a cost of $50 per order. The cost of each mattress depends on the order size, and the annual holding cost for mattresses is 5% of the unit cost. The store sells the mattresses for a retail price of $250. a. Use this information to fill in the following table in your answer booklet: Annual demand D Order cost Co Holding cost ratio I Selling price per unit r Annual revenue rD b. The wholesaler offers the following discounts depending on the order size: Discount Unit cost C Discount category Order size 0-49 1 0% $200 2 50-99 5% $190 3 100 or more 10% $180 For each discount category, find the holding cost C₁, economic order quantity Q and total annual cost TC -0°C, +Co+DC. +DC . How many mattresses should the store order at a time to minimise the total annual cost? c. Fill in the following table in your answer booklet based on the economic order quantity chosen in (b). Economic order quantity ė Unit cost C Cost of holding one unit Ch Annual holding cost 10% Optimal order frequency D e Annual order cost Annual inventory cost Total annual cost Annual profit -Co DC TC rD-TC

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

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

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

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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