Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps is organic palm oil. She needs 1000 kg of palm oil per day, on average. The supplier charges a $60 delivery fee per order (which is independent of the order size) and $4.75 per kg. Sarah’s annual holding cost is 25 percent. Assume she operates and sells five days per week, 52 weeks per year. a. If Sarah wants to minimize her annual ordering and inventory holding costs, how much palm oil should she purchase with each order (in kg)? b. If Sarah orders 4000 kg with each order, what would be the annual sum of the ordering and holding costs? c. If Sarah orders 8000 kg with each order, what would be the sum of the ordering and holding costs per kg sold? d. Sarah’s supplier is willing to sell her palm oil at a 5 percent discount if she purchases 15,000 kg at a time. If she were to purchase 15,000 kg per order, what would be her annual sum of the ordering and holding costs?
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.
Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for
her soaps is organic palm oil. She needs 1000 kg of palm oil per day, on average. The
supplier charges a $60 delivery fee per order (which is independent of the order size)
and $4.75 per kg. Sarah’s annual holding cost is 25 percent. Assume she operates and
sells five days per week, 52 weeks per year.
a. If Sarah wants to minimize her annual ordering and inventory holding costs, how
much palm oil should she purchase with each order (in kg)?
b. If Sarah orders 4000 kg with each order, what would be the annual sum of the ordering
and holding costs? c. If Sarah orders 8000 kg with each order, what would be the sum of the ordering and
holding costs per kg sold?
d. Sarah’s supplier is willing to sell her palm oil at a 5 percent discount if she purchases
15,000 kg at a time. If she were to purchase 15,000 kg per order, what would be her
annual sum of the ordering and holding costs?
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