Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter C, Problem 3P
Summary Introduction
Interpretation: The economic production lot size (ELS) should be calculated.
Concept Introduction: Economic production of a lot is the quantity produced at lowest stock value. It is the minimum of total cost that requires for output.
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Rapallo Sneakers, Inc. sells a pair of LG sneakers for $42. Due to the recent fitness craze, these shoes are in high demand: 52 pairs of shoes are sold per week. The ordering cost is $42 per order, and the annual holding cost is 25 percent of the selling price. If the store operates 48 weeks a year, what can you say about the size of the current order quantity of 225 pairs?
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The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 50 cars per month. The cars cost $80 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%.
(a)
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Q*= TC=$
(b)
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Q*= TC=$
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days
(d)Would you recommend a…
Chapter C Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
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