Santizit, Inc. produces a constant supply of hand sanitizer bottles (adjusted for seasonality) to its distributors. Recently the sales team increased their forecast to the distributors. With the updated sales forecast, the operations management met to discuss the need to revise their optimal, or economic, order quantity. During the meeting, your manager assigns you to calculate the economic order quantity of cases of hand sanitizer bottles that the plant would need to achieve to meet the forecasted supply to the distributors. The operations supervisor provides you with some key information. • There are 12 bottles in each innerpack. • Each case contains 5 innerpacks. • The average annual holding cost per case is $6. • The cost per order is $130. • The plant operates Monday through Friday and has two weeks per year that it is shut down for maintenance. • The maximum inventory at the end of each production run is 4% greater than the demand. • Assume daily demand of 12,703 bottles per day. Round final answer up the nearest whole number.
Santizit, Inc. produces a constant supply of hand sanitizer bottles (adjusted for seasonality) to its distributors. Recently the sales team increased their forecast to the distributors. With the updated sales forecast, the operations management met to discuss the need to revise their optimal, or economic, order quantity. During the meeting, your manager assigns you to calculate the economic order quantity of cases of hand sanitizer bottles that the plant would need to achieve to meet the forecasted supply to the distributors. The operations supervisor provides you with some key information. • There are 12 bottles in each innerpack. • Each case contains 5 innerpacks. • The average annual holding cost per case is $6. • The cost per order is $130. • The plant operates Monday through Friday and has two weeks per year that it is shut down for maintenance. • The maximum inventory at the end of each production run is 4% greater than the demand. • Assume daily demand of 12,703 bottles per day. Round final answer up the nearest whole number.
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...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.