Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $35per delivery (no matter how much is delivered) and $1.20 per gallon. Joe’s annual holdingcost per unit is 35 percent of the price per gallon. Joe uses 250 gallons of malt per week.a. Suppose Joe orders 1000 gallons each time. What is his average inventory (in gal)?b. Suppose Joe orders 1500 gallons each time. How many orders does he place with hissupplier each year?c. How many gallons should Joe order from his supplier with each order to minimize thesum of the ordering and holding costs?d. Suppose Joe orders 2500 gallons each time he places an order with the supplier. Whatis the sum of the ordering and holding costs per gallon?e. Suppose Joe orders the quantity from part (C) that minimizes the sum of the orderingand holding costs each time he places an order with the supplier. What is the annualcost of the EOQ expressed as a percentage of the annual purchase cost?f. If Joe’s supplier only accepts orders that are an integer multiple of 1000 gallons, howmuch should Joe order to minimize ordering and holding costs per gallon?g. Joe’s supplier offers a 3 percent discount if Joe is willing to purchase 8000 gallons ormore. What would Joe’s total annual cost (purchasing, ordering, and holding) be if hewere to take advantage of the discount?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $35
per delivery (no matter how much is delivered) and $1.20 per gallon. Joe’s annual holding
cost per unit is 35 percent of the price per gallon. Joe uses 250 gallons of malt per week.
a. Suppose Joe orders 1000 gallons each time. What is his average inventory (in gal)?
b. Suppose Joe orders 1500 gallons each time. How many orders does he place with his
supplier each year?
c. How many gallons should Joe order from his supplier with each order to minimize the
sum of the ordering and holding costs?
d. Suppose Joe orders 2500 gallons each time he places an order with the supplier. What
is the sum of the ordering and holding costs per gallon?
e. Suppose Joe orders the quantity from part (C) that minimizes the sum of the ordering
and holding costs each time he places an order with the supplier. What is the annual
cost of the EOQ expressed as a percentage of the annual purchase cost?
f. If Joe’s supplier only accepts orders that are an integer multiple of 1000 gallons, how
much should Joe order to minimize ordering and holding costs per gallon?
g. Joe’s supplier offers a 3 percent discount if Joe is willing to purchase 8000 gallons or
more. What would Joe’s total annual cost (purchasing, ordering, and holding) be if he
were to take advantage of the discount?
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