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2. The Alpha Shoe Company purchases leather from Beta Textile Mills. The Alpha Company uses 15,000 yard of the leather per year (365 days) to make shoes. The cost of ordering leather from textile company is P100,000 per order. It cost Alpha P30 per yard annually to hold a yard of leather in inventory. Determine the optimal number of yards of leather the Alpha Company should order, the minimum total annual inventory cost, the optimal number of orders per year and the optimal time between orders.

2. The Alpha Shoe Company purchases leather from Beta Textile Mills. The Alpha Company uses 15,000 yard of the leather per year (365 days) to make shoes. The cost of ordering leather from textile company is P100,000 per order. It cost Alpha P30 per yard annually to hold a yard of leather in inventory. Determine the optimal number of yards of leather the Alpha Company should order, the minimum total annual inventory cost, the optimal number of orders per year and the optimal time between orders.

Practical Management Science
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...
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2. The Alpha Shoe Company purchases leather from Beta Textile Mills. The Alpha Company uses 15,000 yard of the leather per year (365 days) to make shoes. The cost of ordering leather from textile company is P100,000 per order. It cost Alpha P30 per yard annually to hold a yard of leather in inventory. Determine the optimal number of yards of leather the Alpha Company should order, the minimum total annual inventory cost, the optimal number of orders per year and the optimal time between orders.
Transcribed Image Text:2. The Alpha Shoe Company purchases leather from Beta Textile Mills. The Alpha Company uses 15,000 yard of the leather per year (365 days) to make shoes. The cost of ordering leather from textile company is P100,000 per order. It cost Alpha P30 per yard annually to hold a yard of leather in inventory. Determine the optimal number of yards of leather the Alpha Company should order, the minimum total annual inventory cost, the optimal number of orders per year and the optimal time between orders.
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