Part 2 a) What is the optimum ordering quantity? ________ units (round your response to the nearest whole number). Part 3 b) What is the annual holding cost? $_______ (round your response to two decimal places). Part 4 c) What is the annual ordering cost? $_________ (round your response to two decimal places).
Part 2 a) What is the optimum ordering quantity? ________ units (round your response to the nearest whole number). Part 3 b) What is the annual holding cost? $_______ (round your response to two decimal places). Part 4 c) What is the annual ordering cost? $_________ (round your response to two decimal places).
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 14P
Related questions
Question
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer.
≻For
a small order
(2,000
pieces or less) her vendor quotes a price of
$1.80/piece.
≻If
she orders
2,001
to
5,000
pieces, the price drops to
$1.60/piece.
≻5,001
to
10,000
pieces brings the price to
$1.40/piece,
and≻10,001
and above reduces the price to
$1.25/piece.
Lisa's order costs are
$200.00
per order, her annual holding costs are
5%,
and the annual demand is
15,000
pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range):Part 2
a) What is the optimum ordering quantity?
________
units (round your response to the nearest whole number).Part 3
b) What is the annual holding cost?
$_______
(round your response to two decimal places).Part 4
c) What is the annual ordering cost?
$_________
(round your response to two decimal places).Part 5
d) What are the annual costs of the silverware itself with an optimal order quantity?
$_________
(round your response to the nearest whole number).Part 6
e) What is the total annual cost, including ordering, holding, and purchasing the silverware?
$__________
(round your response to two decimal places).Expert Solution
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