2 Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the orderingcost is $121 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue ChipManufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shownbelow.Rich Blue Chip's Price StructureQuantity Purchased1-99 units100-199 units200 or more unitsPrice/Unit$350$325$300a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and holdthese integrated chips?The optimal order quantity after the change in pricing structure isnumber).units (enter your response as a wholeThe total annual cost for Bell computers to order, purchase, and hold the integrated chips is $(round yourresponse to the nearest whole number)hob) EtheClear alleck answerGet more help -Exp

Answered: Image /qna-images/answer/5b2767e6-0ca7-4da5-af78-659d7a840e85.jpg

Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $121 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Quantity Purchased 1-99 units Price/Unit $350 100-199 units 200 or more units $325 $300 a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order purchase, and hold these integrated chips? The optimal order quantity after the change in pricing structure is units (enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $ (round your response to the nearest whole number)

Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $121 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Quantity Purchased 1-99 units Price/Unit $350 100-199 units 200 or more units $325 $300 a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order purchase, and hold these integrated chips? The optimal order quantity after the change in pricing structure is units (enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $ (round your response to the nearest whole number)

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

Chapter2: The Purchasing Process

Section: Chapter Questions

Problem 1GPE

See similar textbooks

Similar questions

Glorious Gadgets is a retailer of astronomy equipment. They purchase equipment from a supplier and then sell it to customers in their store. The function C(x)=1.5x+12500x^−1+5000 models their total inventory costs (in dollars) as a function of x the lot size for each of their orders from the supplier. The inventory costs include such things as purchasing, processing, shipping, and storing the equipment.A) What lot size should Glorious Gadgets order to minimize their total inventory costs? (NOTE: your answer must be the whole number that corresponds to the lowest cost.) B) What is their minimum total inventory cost?
A manufacturer procures a subassembly from a supplier. The annual demand is 145,000 units, the cost per unit is $4, the inventory-carrying charge is 12 percent, and the order cost is $225. For orders between 10,000 but less than 30,000, a five percent discount is applied, and for orders exceeding 30,000, a eight percent discount is applied. What is the optimal order quantity? Use the Quantity Discount Excel template to find your answer.
jeweler purchases silver for use in its products. The firm uses 190 grams of silver per week and purchases silver for $0.52 per gram from a supplier. Each time the firm orders silver from the supplier, the firm must pay a $11 order processing charge. The firm's annual holding cost percentage is 38%. Do not round intermediate calculations. Assume there are 52 weeks in a year and round your answer to two decimal places. If the jeweler orders 1,950 grams of silver with each order, what is the sum of the annual holding and ordering costs? dollars Please do fast ASAP fast
The manager of a large electronics store wants to begin stocking a universal TV remote control device. Expected daily demand is 25 units (250 working days a year). The remote controls can be purchased from either supplier A or supplier B. Their price lists are as follows: Supplier A Supplier B Quantity Unit price Quantity Unit price 1-199 $14 1-149 $14.1 200-499 $13.8 150-349 $13.9 500+ $13.6 350+ $13.7 Ordering cost is $40 per order and annual holding cost is 25 percent of unit price. Lead time for either supplier is 10 days. Which supplier should be chosen and what kind of inventory ordering policy should be adopted?
You are a purchasing manager in charge of stocking a certain type of product. Weekly demand for these products is normally distributed, with a mean of 100 and a standard deviation of 50. Holding costs are 25%, and you must hold a level of inventory corresponding to a cycle service level of 95%. You are faced with two suppliers, QUALITY Products and BEST Products, who offer the following terms. QUALITY sells the products for €5,000 with a minimum order of 100, and a lead time of 1 week with a standard deviation of 0.1 week. BEST sells the transformer for €4,800, has a minimum batch of 1,000, a lead time of 5 weeks, and a lead-time standard deviation of 4 weeks. If you could use both suppliers, how would you structure your orders? Describe the dimensions of supplier performance that affect total cost
A company will begin stocking remote control devices. Expected monthly demand is 800 units. Thecontrollers can be purchased from either supplier A or supplier B. Their price lists are as follows:SUPPLIER A SUPPLIER BQuantity Unit Price Quantity Unit Price1–199 $14.00 1–149 $14.10200–499 13.80 150–349 13.90500 + 13.60 350 + 13.70 Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. Whichsupplier should be used and what order quantity is optimal if the intent is to minimize totalannual costs?
Daily demand for a certain product is normally distributed with a mean of 100 and a standarddeviation of 15. The supplier is reliable and maintains a constant lead time of 5 days.The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit peryear. There are no stockout costs, and uni lled orders are i lled as soon as the order arrives.Assume sales occur over 360 days of the year.Your goal here is to i nd the order quantity and reorder point to satisfy a 90 percentprobability of not stocking out during the lead time.a. What type of system is the company using?b. Find the order quantity.c. Find the reorder point.
A warehouse checks inventory and places an order from a supplier for a particular product once a month. The monthly demand for the product is independent and normally distributed with a mean of 500 and a standard deviation of 100. If the warehouse targets a 90% service level for this product, and the supplier’s lead time is one month, how much safety stock should be held? PLEASE SHOW CALCULATIONS/EXCEL WITH FORMULAS
The Farmer’s Wife is a country store specializing in knickknacks suitable for a farm-house décor. One item experiencing a considerable buying frenzy is a miniature Holstein cow. Average weekly demand is 30 cows, with a standard deviation of 5 cows. The cost to place a replenishment order is $15 and the holding cost is $0.75/cow/year. The supplier, however, is inChina. The lead time for new orders is 8 weeks, with a standard deviation of 2 weeks. The Farmer’s Wife, which is open only 50 weeks a year, wants to develop a continuous review inventory system for this item with a cycle-service level of 90 percent.a. Specify the continuous review system for the cows. Explain how it would work in practice.b. What is the total annual cost for the system you developed?
I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…
The Kirei-Hana Japanese Steak House in San Francisco consumes 3,000 pounds of sirloin steak each month.Yama Hirai, the new restaurant manager, recently completed an MBA degree. He learned that the steak was replenished using an EOQ value of 2,000 pounds. The EOQ value was computed assuming an interest rate of 36 percent per year. Assume that the current cost of the sirloin steak to the steak house is $4 per pound.a. What is the setup cost used in determining the EOQ value? Mr. Hirai received an offer from a meat wholesaler in which a discount of 5 percentwould be given if the steak house purchased the steak in quantities of 3,000 pounds or more.b. Should Mr. Hirai accept the offer from the wholesaler? If so, how much can be saved?c. Because of Mr. Hirai’s language problems, he apparently misunderstood the offer. In fact, the 5 percent discount is applied only to the amounts ordered over 3,000 pounds. Should this offer be accepted, and if so, how much is now saved?
The Rahway, New Jersey, plant of Metalcase, a manufacturer of office furniture, produces metaldesks at a rate of 200 per month. Each desk requires 40 Phillips head metal screws purchasedfrom a supplier in North Carolina. The screws cost 3 cents each. Fixed delivery charges and costsof receiving and storing shipments of the screws amount to about $100 per shipment, independently of the size of the shipment. The firm uses a 25 percent interest rate to determineholding costs. Metalcase would like to establish a standing order with the supplier and is considering several alternatives. What standing order size should they use?