Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 825 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 $52 per order. The cost schedules of two suppliers are as follows: Vendor 1 This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 2 Quantity Price/lb Quantity Price/lb 1-499 $17.00 1-399 $17.10 500-999 $16.75 400-799 $16.85 1,000+ $16.50 800-1,199 $16.60 1,200+ $16.25 For Vendor 1 at $17.00/pound, the economic order quantity is 348 units (round your response to the nearest whole number). For Vendor 2 at $17.10/pound, the economic order quantity is 347 units (round your response to the nearest whole number). b) What quantity should be ordered and which supplier should be used? Therefore the best option is to place the order with Vendor 2 for an order size of 1,200 units. c) The total cost for the most economic order size is $☐ (round your response to the nearest whole number). Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb Vendor 1 Price Range 1 1 499 $17.00 2 500 999 $16.75 3 1,000 999999 $16.50 Done Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb $17.10 Vendor 2 Price Range 1 1 399 2 400 799 $16.85 3 800 1,199 $16.60 4 1,200 999999 $16.25 Done

Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 825 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 $52 per order. The cost schedules of two suppliers are as follows: Vendor 1 This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 2 Quantity Price/lb Quantity Price/lb 1-499 $17.00 1-399 $17.10 500-999 $16.75 400-799 $16.85 1,000+ $16.50 800-1,199 $16.60 1,200+ $16.25 For Vendor 1 at $17.00/pound, the economic order quantity is 348 units (round your response to the nearest whole number). For Vendor 2 at $17.10/pound, the economic order quantity is 347 units (round your response to the nearest whole number). b) What quantity should be ordered and which supplier should be used? Therefore the best option is to place the order with Vendor 2 for an order size of 1,200 units. c) The total cost for the most economic order size is $☐ (round your response to the nearest whole number). Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb Vendor 1 Price Range 1 1 499 $17.00 2 500 999 $16.75 3 1,000 999999 $16.50 Done Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb $17.10 Vendor 2 Price Range 1 1 399 2 400 799 $16.85 3 800 1,199 $16.60 4 1,200 999999 $16.25 Done

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
See similar textbooks
icon
Related questions
Question

Help me solve part C.

Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 825 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 $52 per order. The cost schedules of two suppliers are as follows: Vendor 1 This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 2 Quantity Price/lb Quantity Price/lb 1-499 $17.00 1-399 $17.10 500-999 $16.75 400-799 $16.85 1,000+ $16.50 800-1,199 $16.60 1,200+ $16.25 For Vendor 1 at $17.00/pound, the economic order quantity is 348 units (round your response to the nearest whole number). For Vendor 2 at $17.10/pound, the economic order quantity is 347 units (round your response to the nearest whole number). b) What quantity should be ordered and which supplier should be used? Therefore the best option is to place the order with Vendor 2 for an order size of 1,200 units. c) The total cost for the most economic order size is $☐ (round your response to the nearest whole number).
Transcribed Image Text:Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 825 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 $52 per order. The cost schedules of two suppliers are as follows: Vendor 1 This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? Vendor 2 Quantity Price/lb Quantity Price/lb 1-499 $17.00 1-399 $17.10 500-999 $16.75 400-799 $16.85 1,000+ $16.50 800-1,199 $16.60 1,200+ $16.25 For Vendor 1 at $17.00/pound, the economic order quantity is 348 units (round your response to the nearest whole number). For Vendor 2 at $17.10/pound, the economic order quantity is 347 units (round your response to the nearest whole number). b) What quantity should be ordered and which supplier should be used? Therefore the best option is to place the order with Vendor 2 for an order size of 1,200 units. c) The total cost for the most economic order size is $☐ (round your response to the nearest whole number).
Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb Vendor 1 Price Range 1 1 499 $17.00 2 500 999 $16.75 3 1,000 999999 $16.50 Done Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb $17.10 Vendor 2 Price Range 1 1 399 2 400 799 $16.85 3 800 1,199 $16.60 4 1,200 999999 $16.25 Done
Transcribed Image Text:Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb Vendor 1 Price Range 1 1 499 $17.00 2 500 999 $16.75 3 1,000 999999 $16.50 Done Please copy and paste data from text area below. Selected delimiter: Tab Lower Quantity Upper Quantity Price/lb $17.10 Vendor 2 Price Range 1 1 399 2 400 799 $16.85 3 800 1,199 $16.60 4 1,200 999999 $16.25 Done
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
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
MARKETING 2018
MARKETING 2018
Marketing
ISBN:
9780357033753
Author:
Pride
Publisher:
CENGAGE L
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Contemporary Marketing
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning
Marketing
Marketing
Marketing
ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing
SEE MORE TEXTBOOKS