IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $50, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule: Option Plan Quantity Discount A 1 - 299 0% B 300 - 1,199 0.50% C 1,200+ 1.50% The distributor pays $56 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 10% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 10,750 units. When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 491 Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) 1227 Incorrect Your Answer: 1226 Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) 245 Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) 1227 Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) Number When there is a 0.50% discount (Option Plan B, the second row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) Number

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...

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IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $50, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule: Option Plan Quantity Discount A 1 - 299 0% B 300 - 1,199 0.50% C 1,200+ 1.50% The distributor pays $56 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 10% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 10,750 units. When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 491 Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) 1227 Incorrect Your Answer: 1226 Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) 245 Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) 1227 Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) Number When there is a 0.50% discount (Option Plan B, the second row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) Number

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