A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes. Suppose the supplier has decided that instead of the 2% discount offer the following price breaks will be used: ORDER QUANTITY COST PER BOX Less than 100 $30.00 100 to 199 $29.75 200 or more $29.60 What order quantity should the confectioner make?
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A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes.
Suppose the supplier has decided that instead of the 2% discount offer the following price breaks will be used:
ORDER QUANTITY COST PER BOX
Less than 100 $30.00
100 to 199 $29.75
200 or more $29.60
What order quantity should the confectioner make?
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- A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes. If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year.The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000- tires a re ordered, and $17 per tire if I ,000 or more tires areordered.a) How many tires should Rocky Mountain order each time it places an order?b) What is the total cost of this policy?Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?
- The Great North Supermarket stocks Munchkin Cookies. Demand for Munchkins is 5000 boxes per year (365 days). It costs the store $60 per order of Munchkins, and it costs $0.70 per box per year to keep the cookies in stock. Once an order for Munchkins is placed, it takes four days to reveive the order from a food distributor. Determine the following: a. Optimal order size (EOQ) b.Minimum total annual inventoy cost c. Reorder point (R) d. Number of orders e. Time between ordersAn electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?What quantity discount should the manufacturer offer the retailer in order to minimize the total supplychain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does theretailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODEL
- Suppose the monthly demand for automobile tires at a tire dealer is Normally distributed with a mean of 250 tires and a standard deviation of 50 tires. How many tires must the store have in inventory at the beginning of each month to meet the demand 95% of the time?Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order? Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?Given scenario A hospital is administering a polio vaccine (“polio drops”) to children under the age of 5 in Mexico. It costs the hospital $2 to purchase one shot, and they charge $3 for administering it to a child. Unused vaccines are destroyed. The hospital management needs to decide the number of vaccines to be ordered. Since the hospital has been administering these shots for the last 6 years (24 quarters), they have been able to compile the demand for the vaccine. Determine the optimal service level and optimal order quantity, for the vaccine. Quarter Demand 1 15 2 18 3 21 4 15 5 17 6 22 7 20 8 16 9 22 10 18 11 25 12 15 13 26 14 29 15 16 16 30 17 17 18 25 19 18 20 16 21 19 22 23 23 20 24 15
- ABC firm uses roughly 3,400 pounds of chemical dye a year. Currently, the firm purchases 300 pounds per order and pays P120.00 per pound. The supplier has just announced that orders of 1,000 pounds or more will be filled at a price of P80.00 per pound. The manufacturing firm incurs a cost of P4,000.00 each time it submits an order and assigns an annual holding cost of 17% of the purchase price per pound. a. Determine the order size that will minimize the total cost.b. If the supplier offered the discount at 1,500 pounds instead of 1,000 pounds, what order size would minimize total cost?ANT Infra orders two kinds of precast items: A and B for use in its projects from two different suppliers. The precasts are needed throughout the entire 52-week year. Precast A are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. While, precast B is ordered from a supplier who delivers by every three weeks. Data for both precast items are as follows:Item Precast A Precast BAnnual demand 10,000 5,000Holding cost (% of item cost)20% 20%Order cost $150 $25Lead time 4 weeks 1 weekSafety stock 55 units 5 unitsItem cost $10.00 $2.00 a. Employ Q system for precast A and calculate the EOQ, the reorder point, total inventory cost? b. Employ P system for precast B and estimate the target level inventory and total inventory cost?Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The reorder point, without safety stock, is 200 kilos. The carrying cost is $15 per kilo per year, and the cost of a stockout is $70 per kilo per year. Given the following demand probabilities during the lead time, how much safety stock should be carried? Demand During Lead Time (Kilos) Probability 0 0.1 100 0.1 200 0.2 300 0.4 400 0.2 Part 2 The optimal quantity of safety stock which minimizes expected total cost is enter your response here kilos (enter your response as a whole number).