Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
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Chapter F, Problem 20P
Summary Introduction

To determine: The weekly stock out cost and weekly holding cost and Simulate data for 10 weeks.

Introduction: Simulation is the process that can be used in the operations, which would imitate the real-world process. Simulation process uses random sampling for the generation of realistic variability.

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QUESTION 3a. Delightful Coffee Limited (DCLL) purchases coffee from Hopeful Harvest Plantations (HHP)in Santa Cruz, Trinidad. HHP sells coffee at four (4) different prices, depending on the size ofthe order, as shown in Table 3 (below):Table 3. Hopeful Harvest Plantations - Coffee pricesWeight of Coffee Price ($USD)Less than 45 kilograms $18 per kilogram45 to 449 kilograms $17 per kilogram,450 to 1000 kilograms $16 per kilogramMore than 1000 kilograms $15 per kilogramThe cost to place an order at DCLL is $50. Annual demand is 4,500 units. The holding (orcarrying) cost is 20 percent of the material price. (iii) What is the economic order quantity that DCLL should buy each time? Please answer the above question
QUESTION 3a. Delightful Coffee Limited (DCLL) purchases coffee from Hopeful Harvest Plantations (HHP)in Santa Cruz, Trinidad. HHP sells coffee at four (4) different prices, depending on the size ofthe order, as shown in Table 3 (below):Table 3. Hopeful Harvest Plantations - Coffee pricesWeight of Coffee Price ($USD)Less than 45 kilograms $18 per kilogram45 to 449 kilograms $17 per kilogram,450 to 1000 kilograms $16 per kilogramMore than 1000 kilograms $15 per kilogramThe cost to place an order at DCLL is $50. Annual demand is 4,500 units. The holding (orcarrying) cost is 20 percent of the material price. (i) Calculate the EOQ at each Price Break.
Question 2: Maplewood Confections is a wholesale pastry producer that supplies desserts like tarts and cupcakes to a variety of cafes and delicatessens. Sugar is a critical ingredient in most of their recipes, and they use it consistently. Their current strategy involves ordering 16,000 pounds of sugar every four weeks. Since they operate 5 days a week and approximately 250 days a year, this schedule translates to about 20 working days per order cycle. Their supplier offers sugar in 50-pound bags at a cost of $20 per bag. Each time an order is placed, Maplewood incurs a fixed cost of $64. The annual cost of holding inventory is calculated at 25%. a) Determine Maplewood Confections' annual inventory-related costs (both holding and ordering) under their current ordering regime. Also, calculate the inventory costs per unit of demand. Is there a more efficient ordering policy that you can recommend? Due to an expansion in business, Maplewood has gained numerous new contracts, effectively…
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