Demand for a book at Amazon.com is 250 units per week. The product is supplied to Amazon from a factory. The factory charges Amazon $10 per book, while the total cost of shipping an order from the factory to the Amazon, when the shipment size is Q, is given by Shipment cost = $50 + 2Q Assume the annual inventory carrying cost is 20 percent. a-1. What is Amazon's total cost per shipment? Cost per shipment a-2. What is the annual holding cost per book? (Round your answer to 2 decimal places.) Annual holding cost$ | ]per book b. What is the optimal shipment size? (Assuming 50 weeks per year. Round your answer to the nearest whole number.) Optimal shipment size[ books c. What is the average throughput time? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Demand for a book at Amazon.com is 250 units per week. The product is supplied to Amazon from a factory. The factory charges Amazon $10 per book, while the total cost of shipping an order from the factory to the Amazon, when the shipment size is Q, is given by Shipment cost = $50 + 2Q Assume the annual inventory carrying cost is 20 percent. a-1. What is Amazon's total cost per shipment? Cost per shipment a-2. What is the annual holding cost per book? (Round your answer to 2 decimal places.) Annual holding cost$ | ]per book b. What is the optimal shipment size? (Assuming 50 weeks per year. Round your answer to the nearest whole number.) Optimal shipment size[ books c. What is the average throughput time? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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![Demand for a book at Amazon.com is 250 units per week. The product is supplied to Amazon from a factory. The factory charges
Amazon $10 per book, while the total cost of shipping an order from the factory to the Amazon, when the shipment size is Q, is given
by
Shipment cost = $50 + 2Q
Assume the annual inventory carrying cost is 20 percent.
a-1. What is Amazon's total cost per shipment?
Cost per shipment
$
Q
a-2. What is the annual holding cost per book? (Round your answer to 2 decimal places.)
Annual holding cost$|
per book
b. What is the optimal shipment size? (Assuming 50 weeks per year. Round your answer to the nearest whole number.)
Optimal shipment size
books
c. What is the average throughput time? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Average throughput time
months](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3929d5b-0872-42ba-b021-55cb5b607a80%2Ffbe60d07-c644-48fe-9532-798ff250a897%2Fy72p0ws_processed.png&w=3840&q=75)
Transcribed Image Text:Demand for a book at Amazon.com is 250 units per week. The product is supplied to Amazon from a factory. The factory charges
Amazon $10 per book, while the total cost of shipping an order from the factory to the Amazon, when the shipment size is Q, is given
by
Shipment cost = $50 + 2Q
Assume the annual inventory carrying cost is 20 percent.
a-1. What is Amazon's total cost per shipment?
Cost per shipment
$
Q
a-2. What is the annual holding cost per book? (Round your answer to 2 decimal places.)
Annual holding cost$|
per book
b. What is the optimal shipment size? (Assuming 50 weeks per year. Round your answer to the nearest whole number.)
Optimal shipment size
books
c. What is the average throughput time? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Average throughput time
months
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