44. The Kirei-Hana Japanese Steak House in San Francisco consumes 3,000 pounds ofsirloin steak each month. Yama Hirai, the new restaurant manager, recently completedan MBA degree. He learned that the steak was replenished using an EOQ value of2,000 pounds. The EOQ value was computed assuming an interest rate of 36 percentper year. Assume that the current cost of the sirloin steak to the steak house is $4 perpound.a. What is the setup cost used in determining the EOQ value?Mr. Hirai received an offer from a meat wholesaler in which a discount of 5 percentwould be given if the steak house purchased the steak in quantities of 3,000 pounds ormore.b. Should Mr. Hirai accept the offer from the wholesaler? If so, how much can besaved?c. Because of Mr. Hirai's language problems, he apparently misunderstood the offer.In fact, the 5 percent discount is applied only to the amounts ordered over 3,000pounds. Should this offer be accepted, and if so, how much is now saved?

Answered: 44. The Kirei-Hana Japanese Steak House…

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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