Harmen co. uses 8400 pounds of chemical annually, estimates the holding cost to be 40% of the purchase price (because of spoilage), and estimates order costs to be $24 per order. The supplier need 7 working days to deliver. The cost schedules of two suppliers are as follows: Vendor 1 Vendor 2 Quantity Price/lb Quantity Price/lb 1-250 $16.00 1-200 $16.20 251-300 $15.75 201-300 $15.8 301 + $15.60 301-400 $15.65 401+ $15.5 How many to order and when to order? Assumed that there's 300 working day a year, what is the average time between orders?

Harmen co. uses 8400 pounds of chemical annually, estimates the holding cost to be 40% of the purchase price (because of spoilage), and estimates order costs to be $24 per order. The supplier need 7 working days to deliver. The cost schedules of two suppliers are as follows: Vendor 1 Vendor 2 Quantity Price/lb Quantity Price/lb 1-250 $16.00 1-200 $16.20 251-300 $15.75 201-300 $15.8 301 + $15.60 301-400 $15.65 401+ $15.5 How many to order and when to order? Assumed that there's 300 working day a year, what is the average time between orders?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 8E: Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the...

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