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e plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale pri 10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs th ost of transportation and loading thattotals $1,500 per shipment. ue to a change in the holding cost, the optimal lot size for retailer changes to 3464 units and for the supply chain changes to 11753 units. How n pes the inventory cost (annual holding cost +annual order cost) of the retailer change if the retailer orders the lot size that maximizes the supply hain's profit? O $8,456 O $5,486 O $8,546 O None of the options

e plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale pri 10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs th ost of transportation and loading thattotals $1,500 per shipment. ue to a change in the holding cost, the optimal lot size for retailer changes to 3464 units and for the supply chain changes to 11753 units. How n pes the inventory cost (annual holding cost +annual order cost) of the retailer change if the retailer orders the lot size that maximizes the supply hain's profit? O $8,456 O $5,486 O $8,546 O None of the options

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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The supply chain of product X has only one manufacturer and one retailer. The average sales at the retail chain is 10,000 a month and production at the plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale price of $10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs the cost of transportation and loading thattotals $1,500 per shipment. Due to a change in the holding cost, the optimal lot size for retailer changes to 3464 units and for the supply chain changes to 11753 units. How much does the inventory cost (annual holding cost +annual order cost) of the retailer change if the retailer orders the lot size that maximizes the supply chain's profit? O $8,456 O $5,486 O $8,546 O None of the options $5,846
Transcribed Image Text:The supply chain of product X has only one manufacturer and one retailer. The average sales at the retail chain is 10,000 a month and production at the plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale price of $10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs the cost of transportation and loading thattotals $1,500 per shipment. Due to a change in the holding cost, the optimal lot size for retailer changes to 3464 units and for the supply chain changes to 11753 units. How much does the inventory cost (annual holding cost +annual order cost) of the retailer change if the retailer orders the lot size that maximizes the supply chain's profit? O $8,456 O $5,486 O $8,546 O None of the options $5,846
The supply chain of product X has only one manufacturer and one retailer. The average sales at the retail chain is 10,000 a month and production at the plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale price of $10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs the cost of transportation and loading thattotals $1,500 per shipment. If the retailer orders 10,000 units each time instead of ordering the optimal lot size, its inventory cost will increase by $5954. What is the minimum discount per unit that the manufacturer should offer to encourage the retailer to order in a lot size of 10000 units? None of the options $0.50 per unit O $0.60 per unit $0.65 per unit $0.55 per unit
Transcribed Image Text:The supply chain of product X has only one manufacturer and one retailer. The average sales at the retail chain is 10,000 a month and production at the plant keeps pace with this average demand. Each unit of the product costs the manufacturer $3.9 and is sold to the retailer at a wholesale price of $10. Both the manufacturer and the retailer use an annual holding cost of 25%. The order cost for the retailer is $100. The manufacturer incurs the cost of transportation and loading thattotals $1,500 per shipment. If the retailer orders 10,000 units each time instead of ordering the optimal lot size, its inventory cost will increase by $5954. What is the minimum discount per unit that the manufacturer should offer to encourage the retailer to order in a lot size of 10000 units? None of the options $0.50 per unit O $0.60 per unit $0.65 per unit $0.55 per unit
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