Answered: Details Company B is a retailer of…

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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Please provide answers to subparts d to J:

Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager is determining a minimum-cost inventory plan for an upcoming phone to be launched in the market. She has collected the following information: • Annual demand: 1000 phones • Phone cost: $1,214 each • Phone RRP: $1,349 each • Net weight: 163 g each • Tare weight: 277 g each • Annual inventory holding cost: 15% • Cost per order to replenish inventory: $75 • Annual in-transit holding cost: 10% • Freight rate: $8.10 per kg • Time to process order for freight: 1 days • Freight transit time: 3 days Solve this problem using a non-linear programming (NLP) model to determine the followings: d. The total cost for holding the inventory e. The total cost for transportation f. The total cost for holding the phones during transit g. The total cost for this inventory plan h. The number of orders i. Ordering point j. The profit from this inventory plan

Details
Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager is
determining a minimum-cost inventory plan for an upcoming phone to be launched in the market. She
has collected the following information:
Annual demand: 1000 phones
• Phone cost: $1,214 each
• Phone RRP: $1,349 each
Net weight: 163 g each
Tare weight: 277 g each
Annual inventory holding cost: 15%
• Cost per order to replenish inventory: $75
Annual in-transit holding cost: 10%
• Freight rate: $8.10 per kg
• Time to process order for freight: 1 days
Freight transit time: 3 days
Solve this problem using a non-linear programming (NLP) model to determine the followings:
a. Economic order quantity for the phone in units and in kg
b. The total cost for purchasing the phones
c. The total cost for ordering
d. The total cost for holding the inventory
e. The total cost for transportation
f. The total cost for holding the phones during transit
g. The total cost for this inventory plan
h. The number of orders
i. Ordering point
j. The profit from this inventory plan

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