Stocks of cement on a construction site are allowed to run down to a level of 3 tonnes before being replenished. Cement is used steadily at 50 tonnes per week. Cement costs 15 Euro per tonne and the cost of storage and deterioration per week is 10% of the cement price. Each time cement is ordered, there is a cost of processing this order of 1 Euro.How much cement should be ordered each time?What is the cost of ordering and storing the cement?
Stocks of cement on a construction site are allowed to run down to a level of 3 tonnes before being replenished. Cement is used steadily at 50 tonnes per week. Cement costs 15 Euro per tonne and the cost of storage and deterioration per week is 10% of the cement price. Each time cement is ordered, there is a cost of processing this order of 1 Euro.How much cement should be ordered each time?What is the cost of ordering and storing the cement?
Chapter10: Short-term Decision Making
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Stocks of cement on a construction site are allowed to run down to a level of 3 tonnes before being replenished. Cement is used steadily at 50 tonnes per week. Cement costs 15 Euro per tonne and the cost of storage and deterioration per week is 10% of the cement price. Each time cement is ordered, there is a cost of processing this order of 1 Euro.How much cement should be ordered each time?What is the cost of ordering and storing the cement?
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