An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 to make each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at a steady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both the retailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10 orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). What are 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 supply chain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does the retailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODEL

An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 to make each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at a steady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both the retailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10 orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). What are 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 supply chain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does the retailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODEL

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 13P

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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?
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?
A Mercedes dealer must pay $20,000 for each carpurchased. The annual holding cost is estimated to be 25%of the dollar value of inventory. The dealer sells an averageof 500 cars per year. He believes that demand is backloggedbut estimates that if he is short one car for one year he willlose $20,000 worth of future profits. Each time the dealerplaces an order for cars, ordering cost amounts to $10,000.Determine the Mercedes dealer’s optimal ordering policy.What is the maximum shortage that will occur?
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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?
A tire store orders its stock for a popular winter tire once every year. The cost of a tire for the store is $120. The store sells a tire for $140 at the regular price. The regular demand per year is 1,000 tires, which is normally distributed with a standard deviation of 70 tires. Customers do not prefer to buy from an older stock; hence the store does not keep the tires for the next year. The store is able to sell the excess stock at a reduced price of $80 per tire. How many tires the store should order each year?
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