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Operations Management
Consider a hardware supply warehouse that is contractually obligated to deliver 1000 units a specialized fastener to a local manufaturing company each week. Each time the warehouse places an order for these items from its supplier, an ordering and transporation fee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventory value, or $0.25 per year. The warehouse manager would like to know how much to order when inventory gets to zero. Assume that the warehouse works 50 weeks/year.

Consider a hardware supply warehouse that is contractually obligated to deliver 1000 units a specialized fastener to a local manufaturing company each week. Each time the warehouse places an order for these items from its supplier, an ordering and transporation fee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventory value, or $0.25 per year. The warehouse manager would like to know how much to order when inventory gets to zero. Assume that the warehouse works 50 weeks/year.

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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Consider a hardware supply warehouse that is contractually obligated to deliver 1000
units a specialized fastener to a local manufaturing company each week. Each time the
warehouse places an order for these items from its supplier, an ordering and transporation
fee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and
charges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventory
value, or $0.25 per year. The warehouse manager would like to know how much to order
when inventory gets to zero.
Assume that the warehouse works 50 weeks/year.

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