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Based on past sales records, the company has estimated the average daily demand as follows: Period Morning to noon Noon to evening Types of sushi 25 25 Demand per type (pieces) | Total (pieces) 32 40 800 1000 1800 The company incurs the following costs for the production and distribution of the sushi: Fixed production cost The setup cost is $12 per type for an order. $2 per sushi Variable production cost Factory storage cost Shop storage cost Ordering cost Truckload cost ● $0.04 per sushi for half a day $0.1 per sushi for half a day $50 per order The trucking company charges $100 for each trip transporting sushi from the factory to the retail shop. As the company's logistics manager, you have been tasked with evaluating three options to improve distribution performance: Option 1: ● Set up the production line in the early morning to produce 1800 pieces of sushi for an order and deliver them from the factory to the shop before opening hours. The shop will pay the ordering cost for one order and the storage cost for 1000 pieces of sushi for half a day. No storage will be required in the factory.

Based on past sales records, the company has estimated the average daily demand as follows: Period Morning to noon Noon to evening Types of sushi 25 25 Demand per type (pieces) | Total (pieces) 32 40 800 1000 1800 The company incurs the following costs for the production and distribution of the sushi: Fixed production cost The setup cost is $12 per type for an order. $2 per sushi Variable production cost Factory storage cost Shop storage cost Ordering cost Truckload cost ● $0.04 per sushi for half a day $0.1 per sushi for half a day $50 per order The trucking company charges $100 for each trip transporting sushi from the factory to the retail shop. As the company's logistics manager, you have been tasked with evaluating three options to improve distribution performance: Option 1: ● Set up the production line in the early morning to produce 1800 pieces of sushi for an order and deliver them from the factory to the shop before opening hours. The shop will pay the ordering cost for one order and the storage cost for 1000 pieces of sushi for half a day. No storage will be required in the factory.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Help me calculate the fixed production cost for option 1
Based on past sales records, the company has estimated the average daily demand as follows: Period Morning to noon Noon to evening Types of sushi 25 25 Demand per type (pieces) | Total (pieces) 32 40 800 1000 1800 The company incurs the following costs for the production and distribution of the sushi: Fixed production cost The setup cost is $12 per type for an order. $2 per sushi Variable production cost Factory storage cost Shop storage cost Ordering cost Truckload cost ● $0.04 per sushi for half a day $0.1 per sushi for half a day $50 per order The trucking company charges $100 for each trip transporting sushi from the factory to the retail shop. As the company's logistics manager, you have been tasked with evaluating three options to improve distribution performance: Option 1: ● Set up the production line in the early morning to produce 1800 pieces of sushi for an order and deliver them from the factory to the shop before opening hours. The shop will pay the ordering cost for one order and the storage cost for 1000 pieces of sushi for half a day. No storage will be required in the factory.
Transcribed Image Text:Based on past sales records, the company has estimated the average daily demand as follows: Period Morning to noon Noon to evening Types of sushi 25 25 Demand per type (pieces) | Total (pieces) 32 40 800 1000 1800 The company incurs the following costs for the production and distribution of the sushi: Fixed production cost The setup cost is $12 per type for an order. $2 per sushi Variable production cost Factory storage cost Shop storage cost Ordering cost Truckload cost ● $0.04 per sushi for half a day $0.1 per sushi for half a day $50 per order The trucking company charges $100 for each trip transporting sushi from the factory to the retail shop. As the company's logistics manager, you have been tasked with evaluating three options to improve distribution performance: Option 1: ● Set up the production line in the early morning to produce 1800 pieces of sushi for an order and deliver them from the factory to the shop before opening hours. The shop will pay the ordering cost for one order and the storage cost for 1000 pieces of sushi for half a day. No storage will be required in the factory.
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