Loose Leaf for Operations Management in the Supply Chain: Decisions and Cases 7e
7th Edition
ISBN: 9781260151954
Author: SCHROEDER, Roger G
Publisher: McGraw-Hill Education
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Chapter 14, Problem 1P
The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:
Sales = 8 cases per week
Ordering cost = $10 per order
CaI1ying charge = 20 percent per year
Item cost = $80 per case
- a. How many cases should be ordered at a time?
- b. How often will tea be ordered?
- c. What is the annual cost of ordering and carrying tea?
- d. What factors might cause the firm to order a larger or smaller amount than the EOQ?
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A natural food store carries a brand of coffee called World’s Greatest Coffee. The following data should be used in your calculations.
Demand/Sales = 10 cases of coffee per week (you will need to convert this to an annual amount)
Ordering Cost = $12 per order
Carrying Charge = 18% per year
Unit Cost = $75 per case
1. What is the annual cost or ordering the coffee? What is the annual cost of carrying the coffee? And what is the total cost (ordering and carrying costs added together)?2. Name three reasons or factors that might cause the firm to order a larger or smaller amount than the EOQ.
The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per casea. How many cases should be ordered at a time?b. How often will tea be ordered?c. What is the annual cost of ordering and carrying tea?d. What factors might cause the firm to order a larger or smaller amount than the EOQ?
A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how much is delivered) and $1.20 per gallon. Annual holding cost is 35% of the price per gallon. Usage is 250 gallons/week.
Part f) If orders must be in integer multiples of 1000 gallons, how much should be ordered to minimize ordering and holding costs PER GALLON?
g) A 3% purchase price discount is given if orders are for 8000 gallons or more. What would total annual costs (purchasing, ordering and holding) be using this discount?
Chapter 14 Solutions
Loose Leaf for Operations Management in the Supply Chain: Decisions and Cases 7e
Ch. 14.S - eXcel Suppose that for problem 1 in the chapter,...Ch. 14.S - Prob. 2PCh. 14.S - For problem 2 in the chapter, suppose the Grinell...Ch. 14.S - A producer of electronic parts wants to take...Ch. 14 - Identify the different types of inventories (raw...Ch. 14 - Why are stockout costs difficult to determine?...Ch. 14 - What is the difference between a requirements...Ch. 14 - Compare and contrast the management of finished...Ch. 14 - For a given service level, why does a P system...Ch. 14 - Under what circumstances might CPFR be useful, and...
Ch. 14 - Prob. 7DQCh. 14 - What is the appropriate role of inventory turnover...Ch. 14 - Suppose you are managing a chain of retail...Ch. 14 - The Always Fresh Grocery Store carries a...Ch. 14 - The Grinell Machine Shop makes a line of metal...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - Prob. 4PCh. 14 - The famous Widget Company sells widgets at the...Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - An electronics retailer carries a particular...Ch. 14 - An electronics retailer carries a particular...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - eXcel 13. The Cover-up Drapery Company carries...Ch. 14 - Suppose you are the supplier of the Cover-up...
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