Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
13th Edition
ISBN: 9780135225899
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Textbook Question
Chapter 12, Problem 22P
Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 400 per month. The company’s supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below.
Rich Blue Chip’s Price Structure
| QUANTITY PURCHASED | PRICE/UNIT |
| 1–99 units | $350 |
| 100–199 units | $325 |
| 200 or more units | $300 |
- a. What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips?
- b. Bell Computers wishes to use a 10% holding cost rather than the fixed $35 holding cost in (a). What is the optimal order quantity, and what is the optimal annual cost?
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Students have asked these similar questions
12.27 Chris Sandvig Irrigation, Inc., has summarized the
price list from four potential suppliers of an underground control
valve. See the accompanying table. Annual usage is 2,400 valves;
order cost is $10 per order; and annual inventory holding costs
are $3.33 per unit.
Which vendor should be selected and what order quantity is
best if Sandvig Irrigation wants to minimize total cost? PX
VENDOR A
QUANTITY
1-49
50-74
75-149
150-299
300-499
500+
VENDOR C
QUANTITY
1-99
100-199
200-399
400+
PRICE
$35.00
34.75
33.55
32.35
31.15
30.75
PRICE
$34.50
33.75
32.50
31.10
VENDOR B
QUANTITY
1-74
75-149
150-299
300-499
500+
PRICE
$34.75
34.00
32.80
31.60
30.50
VENDOR D
QUANTITY
1-199
200-399
400+
PRICE
$34.25
33.00
31.00
Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 800 valves; order cost is $7 per order; and annual inventory holding costs are $2.15
per unit.
D
Vendor A
units at a time from
Vendor C
Vendor B
Quantity
1-14
15-24
25-99
100-199
200-399
400+
Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost?
Chris Sandvig Irrigation should order
(enter your response as a whole number).
Vendor A
Price
$35.00
34.75
33.55
32.35
31.15
30.75
Vendor D
Vendor B
Quantity
1-24
25-99
100-199
200-399
400+
Price
$34.75
34.00
32.80
31.60
30.50
Vendor C
Quantity
1-49
50-149
150-299
300+
Price
$34.50
33.75
32.50
31.10
Vendor D
Quantity
1-149
150-299
300+
Price
$34.25
33.00
31.00
Use the information below to answer the following question(s).
Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80
reams per week at $150 per ream. The vendor covers all shipping costs. Office
Supply House is not required to inspect the shipment upon entry. Office Supply
House earns 20% on its cash investments. The purchase order lead time is two
weeks. The following cost data are available:
Relevant ordering costs per
purchase order
$53.75
Relevant insurance, materials
handling, breakage, and so on,
per year
$4.25
How many deliveries will be required at the economic order quantity level?
42 deliveries
18 deliveries
52 deliveries
20 deliveries
37 deliveries
Chapter 12 Solutions
Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question
2. With the advent of low-cost...Ch. 12 - Question
3. What is the purpose of the ABC...Ch. 12 - Question
4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question
7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...
Ch. 12 - What is meant by service level?Ch. 12 - Explain the following: All things being equal, the...Ch. 12 - Describe the difference between a fixed-quantity...Ch. 12 - Explain what is meant by the expression robust...Ch. 12 -
15. What is “safety stock”? What does safety...Ch. 12 - When demand is not constant, the reorder point is...Ch. 12 - How are inventory levels monitored in retail...Ch. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics is a large manufacturer of...Ch. 12 - Boreki Enterprises has the following 10 items in...Ch. 12 - Jean-Marie Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Bevilles computer training school, in...Ch. 12 - • 12.6 If D = 8,000 per month, S = $45 per order,...Ch. 12 - Henry Crouchs law office has traditionally ordered...Ch. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Abey Kuruvilla, of Parkside Plumbing, uses 1,200...Ch. 12 - ••• 12.15 M. Cotteleer Electronics supplies...Ch. 12 - •• 12.16 Race One Motors is an Indonesian car...Ch. 12 - Radovilsky Manufacturing Company, in Hayward,...Ch. 12 - Arthur Meiners is the production manager of...Ch. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Bell Computers purchases integrated chips at 350...Ch. 12 - Wang Distributors has an annual demand for an...Ch. 12 - Question 12.22 The catering manager of La Vista...Ch. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Question 12.26 Emery Pharmaceutical uses an...Ch. 12 - Question 12.27 Barbara Flynn is in charge of...Ch. 12 - Question 12.28 Based on available information,...Ch. 12 - Question 12.29 Authentic Thai rattan chairs...Ch. 12 - Question 12.30 Tobacco is shipped from North...Ch. 12 - Prob. 45PCh. 12 - Question 12.32 Chicagos Hard Rock Hotel...Ch. 12 - Question 12.33 First Printing has contracts with...Ch. 12 - Prob. 48PCh. 12 - Prob. 29PCh. 12 - Question 12.36 Cynthia Knotts oyster bar buys...Ch. 12 - Question 12.37 Henrique Correas bakery prepares...Ch. 12 - Question 12.38 University of Florida football...Ch. 12 - Prob. 30PCh. 12 - Question 12.40 A gourmet coffee shop in downtown...Ch. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 50PCh. 12 - Prob. 5PCh. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Inventory Control at Wheeled Coach Video Case...Ch. 12 - Prob. 3.2VCCh. 12 - Prob. 3.3VC
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