Millennium Liquors is a wholesaler of sparkling wines. Their most popular product is the French Bete Noire which is shipped directly from France. Weekly demand is for 40 cases. Millennium purchases each case for $105, there is a $350 fixed cost for each order (independent of the quantity ordered) and their annual holding cost is 15 percent. What order quantity minimizes Millennium's annual ordering and holding costs? b. If Millennium chooses to order 325 cases each time, what is the sum of their annual ordering and holding costs? (Round your answer to 2 decimal places.) C. If Millennium chooses to order 100 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? If Millennium is restricted to order in multiples of 50 cases (e.g., 50, 100, 150, d. etc.) how many cases should they order to minimize their annual ordering and holding costs? Millennium is offered a 5.00% discount if they purchase at least 1,000 cases. e. If they decide to take advantage of this discount, what is the sum of their annual ordering and holding costs? cases per case cases

Millennium Liquors is a wholesaler of sparkling wines. Their most popular product is the French Bete Noire which is shipped directly from France. Weekly demand is for 40 cases. Millennium purchases each case for $105, there is a $350 fixed cost for each order (independent of the quantity ordered) and their annual holding cost is 15 percent. What order quantity minimizes Millennium's annual ordering and holding costs? b. If Millennium chooses to order 325 cases each time, what is the sum of their annual ordering and holding costs? (Round your answer to 2 decimal places.) C. If Millennium chooses to order 100 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? If Millennium is restricted to order in multiples of 50 cases (e.g., 50, 100, 150, d. etc.) how many cases should they order to minimize their annual ordering and holding costs? Millennium is offered a 5.00% discount if they purchase at least 1,000 cases. e. If they decide to take advantage of this discount, what is the sum of their annual ordering and holding costs? cases per case cases

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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The sales of Whole Care mouthwash at Jen's of Michigan over the past six months have averaged 2,000 cases per month, which is the current order quantity. Jen's of Michigan's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions What is EOQ? What is the cost reduction? What is the reorder point? What is Time between Orders (TBO)?
The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?
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Please answer what is asked in letter B and C. Thank you!
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Note: EOQ means Economic Order Quantity
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