Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter C, Problem 9P
Summary Introduction
Interpretation: The ordering policy that could be recommended.
Concept Introduction: Ordering optimum size (creating no additional or shortage of materials in stock) at minimum ordering cost is EOQ.
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Students have asked these similar questions
As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost, expressed as a percentage of average inventory value, is 20 percent. Your supplier has provided the following price schedule:Minimum Order Quantity Price per Unit1 $2.50200 $2.40300 $2.251,000 $2.00What ordering policy do you recommend?
B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule.
Quantity
Price per Unit
1 - 100
$5.65
101 - 350
$4.95
351 or more
$4.55
What ordering-quantity policy do you recommend?
University Book Store purchases women's polo shirts from a supplier according to the pricing schedule below. The store sells 500,000 shirts each year. The annual cost of maintaining shirts is 25% and the ordering cost is $40.
Quantity per order unit price1- 2499 $ 352500 or more $ 32
The lowest annual acquisition cost for the Bookstore quantity is?
Chapter C Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
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