The Acme Manufacturing Company is concerned about its warehouse needsand how they can best be met. The company produces a line of spare parts forappliance. Due to the combination of production policies and demand patterns,warehousing space requirement vary considerably throughout the year. Spacerequirements are known with a great deal of certainty because the product linesatisfies a replacement market. Growth, or decline, in production and sales isnot anticipated in the near future. Monthly sales rates for a typical year are asfollows:MonthSales, SJan,5,000,000Feb.4,000,000Mar.3,000,000Aprг.2,000,000May1,000,000June250,000July1,250,000Aug.2,250,000Sept.3,000,000Oct3,500,000Nov.4,000,000Dec.4,500,000Total33,750,000Warehouse inventory turns at the rate of two times per month. The price ofmerchandise is $5 per Ib. On average, merchandise occupies 0.1 cubic feet ofwarehouse space per lb and can be stacked 10 ft. high. Given aisles,administrative space, and normal operating efficiency, only 50 percent of thetotal warehouse is actually used for storage.A private warehouse can be constructed and equipped for $40 per sq. ft. andcan be amortized over 20 years. The cost of operations is $0.03 per dollar ofthroughput (Ib). Annual fixed costs amount to $15 per sq. ft. of total space.Space may also be rented for a storage charge on inventory of $0.07 per Ib permonth and a handling charge of $0.06 per lb of throughput.Suppose the company is struggling about building a large (50,000 sq. ft),median (35,000 sq. ft), or small (15,000 sg. ft) warehouse. What size of privatewarehouse should be constructed? What amount of public warehouse spaceshould be rented?

a. Space Requirement in Feb. Given: Inventory Turns = 2 Throughput = $4,000,000 $1000 merchandise…

Answered: The Acme Manufacturing Company is…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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The Acme Manufacturing Company is concerned about its warehouse needs and how they can best be met. The company produces a line of spare parts for appliance. Due to the combination of production policies and demand patterns, warehousing space requirement vary considerably throughout the year. Space requirements are known with a great deal of certainty because the product line satisfies a replacement market. Growth, or decline, in production and sales is not anticipated in the near future. Monthly sales rates for a typical year are as follows: Month Sales, $ Jan. 5,000,000 Feb. 4,000,000 Mar. 3,000,000 Apr. 2,000,000 May 1,000,000 June 250,000 July 1,250,000 Aug. 2,250,000 Sept. 3,000,000 Oct. 3,500,000 Nov. 4,000,000 Dec. 4,500,000 Total 33,750,000 Warehouse inventory turns at the rate of two times per month. The price of merchandise is $5 per lb. On average, merchandise occupies 0.1 cubic feet of warehouse space per lb and can be stacked 10 ft. high. Given…
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