Question: Cash Management Your company is a large distributor of iron rods. It sells approximately 19'000 tons per month to various clients in Switzerland. You have estimated that making an order takes about 7 hours of labour (calling the supplier, negotiating price and conditions, verifying merchandise, etc.) and a logistic cost of 1'000 CHF (mainly transportation cost). The cost of warehousing is about 14.00 CHF/ton and your labour cost is of 75 CHF per hour. Due to the Corona crisis you get a discount of 9.0 % on the transportation cost. i. How many tons should you ask per order? ii. How often should your company make an order from its suppliers.
Question: Cash Management Your company is a large distributor of iron rods. It sells approximately 19'000 tons per month to various clients in Switzerland. You have estimated that making an order takes about 7 hours of labour (calling the supplier, negotiating price and conditions, verifying merchandise, etc.) and a logistic cost of 1'000 CHF (mainly transportation cost). The cost of warehousing is about 14.00 CHF/ton and your labour cost is of 75 CHF per hour. Due to the Corona crisis you get a discount of 9.0 % on the transportation cost. i. How many tons should you ask per order? ii. How often should your company make an order from its suppliers.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question: Cash Management
Your company is a large distributor of iron rods. It sells approximately 19'000 tons per month to
various clients in Switzerland. You have estimated that making an order takes about 7 hours of
labour (calling the supplier, negotiating price and conditions, verifying merchandise, etc.) and a
logistic cost of 1'000 CHF (mainly transportation cost). The cost of warehousing is about 14.00
CHF/ton and your labour cost is of 75 CHF per hour. Due to the Corona crisis you get a discount
of 9.0 % on the transportation cost.
i. How many tons should you ask per order?
ii. How often should your company make an order from its suppliers.
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