Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 775 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $51 per order. The cost schedules of two suppliers are as follows: This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 1 Quantity 1-499 500-999 1,000+ Vendor 2 Price/lb $17.10 $16.85 Price/lb $17.00 $16.75 $16.50 800-1,199 Quantity 1-399 400-799 1,200+ $16.60 $16.25

Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 775 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $51 per order. The cost schedules of two suppliers are as follows: This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 1 Quantity 1-499 500-999 1,000+ Vendor 2 Price/lb $17.10 $16.85 Price/lb $17.00 $16.75 $16.50 800-1,199 Quantity 1-399 400-799 1,200+ $16.60 $16.25

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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Question

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Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 775 pounds per month of the chemical, estimates the holding
cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $51 per order. The cost schedules of two suppliers are as follows:
Q
Q
This exercise contains only parts a, b, and c.
a) What is the economic order quantity for each supplier?
Vendor 1
Quantity
1-499
500-999
1,000+
Price/lb
$17.00
$16.75
$16.50
Vendor 2
Quantity
1-399
400-799
800-1,199
1,200+
Price/lb
$17.10
$16.85
$16.60
$16.25

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