An electronics company has two contract manufacturers in Asia. Foxconn assembles its tablets and smart phones while Flextronics assembles its laptops. Monthly demand for tablets and smartphones is 20,000 units while that for laptops is 5,000. Tablets cost the company $200 while laptops cost $500 and the company has a holding cost of 25 percent. Currently the company has to place separate orders with Foxconn and Flextronics and receives separate shipments. The fixed cost of each shipment is $20,000. Answer the following question: a.Define a shipment capacity that would be violated by size of combined orders, then adjust the amount of 2 orders regarding that capacity and calculate the annual total cost.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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An electronics company has two contract manufacturers in Asia. Foxconn assembles its tablets and smart phones while Flextronics assembles its laptops. Monthly demand for tablets and smartphones is 20,000 units while that for laptops is 5,000. Tablets cost the company $200 while laptops cost $500 and the company has a holding cost of 25 percent. Currently the company has to place separate orders with Foxconn and Flextronics and receives separate shipments. The fixed cost of each shipment is $20,000. Answer the following question: a.Define a shipment capacity that would be violated by size of combined orders, then adjust the amount of 2 orders regarding that capacity and calculate the annual total cost.
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