Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Chao Han is the head of the procurement and inventory management unit at a successful tea producer in China. On average, their annual demand for a particular Pu'er tea (Sheng) is 10,000 kg. One of the origins of this tea is Hekai Mountain. Purchasing price of the raw tea is $400 per kilo. Annual holding cost is 30% of purchasing value, and ordering cost per kilo is $30. In case of stockout, customers would wait. However, on average, the cost of backorder per kilo is $25. What is average backorder that Chao faces? 53.23 kg O 26.61 kg 70.71 kg 35.35 kg

Chao Han is the head of the procurement and inventory management unit at a successful tea producer in China. On average, their annual demand for a particular Pu'er tea (Sheng) is 10,000 kg. One of the origins of this tea is Hekai Mountain. Purchasing price of the raw tea is $400 per kilo. Annual holding cost is 30% of purchasing value, and ordering cost per kilo is $30. In case of stockout, customers would wait. However, on average, the cost of backorder per kilo is $25. What is average backorder that Chao faces? 53.23 kg O 26.61 kg 70.71 kg 35.35 kg

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...
See similar textbooks
icon
Related questions
Question

8

Chao Han is the head of the procurement and inventory management unit at a successful tea producer in China. On average, their annual demand for a particular Pu'er tea (Sheng) is 10,000 kg. One of the origins of this tea is Hekai Mountain. Purchasing price of the raw tea is $400 per kilo. Annual holding cost is 30% of purchasing value, and ordering cost per kilo is $30. In case of stockout, customers would wait. However, on average, the cost of backorder per kilo is $25. What is average backorder that Chao faces? 53.23 kg O 26.61 kg 70.71 kg 35.35 kg
Transcribed Image Text:Chao Han is the head of the procurement and inventory management unit at a successful tea producer in China. On average, their annual demand for a particular Pu'er tea (Sheng) is 10,000 kg. One of the origins of this tea is Hekai Mountain. Purchasing price of the raw tea is $400 per kilo. Annual holding cost is 30% of purchasing value, and ordering cost per kilo is $30. In case of stockout, customers would wait. However, on average, the cost of backorder per kilo is $25. What is average backorder that Chao faces? 53.23 kg O 26.61 kg 70.71 kg 35.35 kg
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS