Suppose that your firm manufactures rubber chickens. Monthly demand for the chickens is 32,000 units. Setup costs per order is $85, and the annual holding cost percentage is 17%. The chickens cost $8 to produce and are sold for $18. a. if you have a warehouse, what is the economic order quantity for the chickens? what is the total of the annual setup and holding cost of this quantity? b. suppose that you have 25 warehouses instead of one, and total demand is equally distributed among the warehouses. If setup and holding costs are the same in the smaller warehouses as they would be for a single large warehousem what is the EOQ for the chickens at each of the 25 warehouses? what is the total of the annual setup and holding costs at each warehouse? what is the total of the company's annual setup and holding costs? c. using centralized warehousing as in part a implies that products must be shipped over longer distances. suppose that shipping costs are $0.80 per unit when using one warehouse and $0.64 per unit when using 25 warehouses. which option should the company choose, considering all relevant costs? d. based on your answers to a, and b, if total company demand is D what is the general formula for the total company EOQ cost of using N warehouses instead of one (if the demand is spread evenly over those warehouses)?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Suppose that your firm manufactures rubber chickens. Monthly demand for the chickens is 32,000 units. Setup costs per order is $85, and the annual holding cost percentage is 17%. The chickens cost $8 to produce and are sold for $18.
a. if you have a warehouse, what is the economic order quantity for the chickens? what is the total of the annual setup and holding cost of this quantity?
b. suppose that you have 25 warehouses instead of one, and total demand is equally distributed among the warehouses. If setup and holding costs are the same in the smaller warehouses as they would be for a single large warehousem what is the EOQ for the chickens at each of the 25 warehouses? what is the total of the annual setup and holding costs at each warehouse? what is the total of the company's annual setup and holding costs?
c. using centralized warehousing as in part a implies that products must be shipped over longer distances. suppose that shipping costs are $0.80 per unit when using one warehouse and $0.64 per unit when using 25 warehouses. which option should the company choose, considering all relevant costs?
d. based on your answers to a, and b, if total company demand is D what is the general formula for the total company EOQ cost of using N warehouses instead of one (if the demand is spread evenly over those warehouses)?
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