Determine which delivery alternative would be most economical for 50 boxes of parts. Each box costs $434 and the annual holding cost is 20% of the cost. Assume 365 days per year. Overnight delivery option costs $300, and eight-day delivery option costs $125 a. The overnight option is at least $182 cheaper than eight-day b. The overnight option is at least $91 cheaper than eight-day c. The eight-day option is at least $182 cheaper than overnight d. The eight-day option is at least $91 cheaper than overnight

Determine which delivery alternative would be most economical for 50 boxes of parts. Each box costs $434 and the annual holding cost is 20% of the cost. Assume 365 days per year. Overnight delivery option costs $300, and eight-day delivery option costs $125 a. The overnight option is at least $182 cheaper than eight-day b. The overnight option is at least $91 cheaper than eight-day c. The eight-day option is at least $182 cheaper than overnight d. The eight-day option is at least $91 cheaper than overnight

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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Determine which delivery alternative would be most economical for 70 boxes of parts. Each box costs $346 and the annual holding cost is 30% of the cost. Assume 365 days per year. Overnight delivery option costs $300, and eight-day delivery option costs $125 a. The overnight option is at least $70 cheaper than eight-day b. The eight-day option is at least $35 cheaper than overnight c. The eight-day option is at least $70 cheaper than overnight d. The overnight option is at least $35 cheaper than eight-day
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Bart’s Barometer Business (BBB) is a retail outlet that deals exclusively with weather equipment. Currently BBB is trying to decide on an inventory and reorder policy for home barometers. These cost BBB $60 each and demand is about 1200 per year distributed fairly evenly throughout the year. Reordering costs are $50 per order and holding costs are figured at 20% of the cost of the item. BBB is open 300 days a year (6 days a week and closed two weeks in August). Lead time is 60 working days. a.Develop a total cost model for this system. b. What is the optimal reorder quantity? c. What is the cycle time?
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