Jam costs $10/jar, requires a 6mo. lead time, and willsell for $35/jar. If you stock out, you'll face a $25/jarloss of goodwill. Placing an order costs $50, andmoney that is tied up in capital is assumed to have a20% interest rate for calculating holding costs. Duringthe 6-mo replenishment time, he sells ~100 jars, butwith substantial variation. Estimates are a standarddeviation of demand during each 6-mo period of 25jars. Assume demand is described by a normaldistribution. How should the Jam be ordered?

EOQ stands for Economic Order Quantity. It is a measurement used in the field of Operations,…

Answered: Jam costs $10/jar, requires a 6mo. lead…

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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A company has a chance to reduce their inventory ordering costs by placing larger quantity orders using the discount schedule below. What should their optimal order quantity be if this company purchases this single inventory item with an e-mail ordering cost of $4, an annual holding cost rate (per unit) of 2% of the price/unit, and an annual demand of 10,000 units? Order quantity (units) Price/unit ($) 0 to 2,499 1.20 2,500 to 3,999 1.00 4,000 or more 0.98
Give typed full explanation
the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?
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Assuming Normal Distribution, what would the optimal (s,Q) policy be for the given parameters below? Given data: Demand daily has mu = 1768, sigma = 5.37, with a unit purchased cost is $15 (annual interest rate is 20%). The order cost is $50 with a back ordering cost of $25. The order lead time is 3 days.
The annual demand for an item is 10,000 units. The cost to process an order is $75 and the annual inventory holding cost is 20% of the item's unit price. The unit price per item is $10. You do NOT need to show your calculation steps. There is NO partial credits for any mistake (ie., cach answer is either right or wrong). Discount Number Оuаntity 1-4999 Discount Discount= X% 5000 or more Discount= 10% Q.5.A. What is the unit price your supplier would charge you if you purchase 5002 units? Q.5.B. If the annual product cost for Discount umber 1 is $100,000, what is X?
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