The small boatyard White Kayaks built 156 epoxy kay aks last year. Each of these requires 12 kg of epoxy, purchased in 6-kg barrels at $170 each, with a freight cost of $18 per shipment plus $1/kg. The annual carrying cost is estimated to 20% of the value. a) If the purchase policy is to buy 20 barrels each time, how much time can be spent on administrative work if the order quantity is considered optimal? The boat-builder charges $25/hour. b) If time spent is 30 minutes, what would be the optimal order quantity?

The small boatyard White Kayaks built 156 epoxy kay aks last year. Each of these requires 12 kg of epoxy, purchased in 6-kg barrels at $170 each, with a freight cost of $18 per shipment plus $1/kg. The annual carrying cost is estimated to 20% of the value. a) If the purchase policy is to buy 20 barrels each time, how much time can be spent on administrative work if the order quantity is considered optimal? The boat-builder charges $25/hour. b) If time spent is 30 minutes, what would be the optimal order quantity?

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Description: The small boatyard White Kayaks built 156 epoxy kay aks last year. Each of these requires 12 kg of epoxy, purchased in 6-kg barrels at $170 each, with a freight cost of $18 per shipment plus $1/kg. The annual carrying cost is estimated to 20% of the

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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