The Soon Company is a multinational company that purchases one of its crucial components from a supplier who offers quantity discounts to encourage larger order quantities. The supply chain manager of the company wants to determine the optimal order quantity to minimize the total annual inventory cost. The company’s annual demand forecast for the item is 850 units, the order cost is $10 per order, and the annual holding rate is 41 percent. The price schedule for the item is: Order Quantity Price per Unit ($) 1–150 6.00 151–350 5.50 351 and above 5.00 The first break point is 151 units and the second is 351 units. The spreadsheet is below and perform the required analysis Optimal Order Quantity with Quantity Discounts Annual Demand Forecast 850 Order cost per order $10.00 Annual holding rate 41% Order Quantity Price per unit 1 150 $6.00 151 350 $5.50 351 1.00E+99 $5.00 Feasible? EOQ at the highest price point EOQ at the middle price point EOQ at the lowest price point Total Annual TAIC(EOQ) Inventory TAIC(break point 1) Costs TAIC(break point 2) Optimal Order Quantity TAIC, corresponding to OOQ
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.
The Soon Company is a multinational company that purchases one of its crucial components from a supplier who offers quantity discounts to encourage larger order quantities. The
| Order Quantity | Price per Unit ($) |
| 1–150 | 6.00 |
| 151–350 | 5.50 |
| 351 and above | 5.00 |
The first break point is 151 units and the second is 351 units. The spreadsheet is below and perform the required analysis
| Optimal Order Quantity with Quantity Discounts | |||
| Annual Demand Forecast | 850 | ||
| Order cost per order | $10.00 | ||
| Annual holding rate | 41% | ||
| Order Quantity | Price per unit | ||
| 1 | 150 | $6.00 | |
| 151 | 350 | $5.50 | |
| 351 | 1.00E+99 | $5.00 | |
| Feasible? | |||
| EOQ at the highest price point | |||
| EOQ at the middle price point | |||
| EOQ at the lowest price point | |||
| Total Annual | TAIC(EOQ) | ||
| Inventory | TAIC(break point 1) | ||
| Costs | TAIC(break point 2) | ||
| Optimal Order Quantity | |||
| TAIC, corresponding to OOQ |
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