LubeCar specializes in fast automobile oil change. The garage buys oil in bulk at 40pesos per liter. A price discount of 3 pesos per liter is available if LubeCar purchasesmore than 500 liters. The garage uses approximately 150 liters per day. Holding cost is2 pesos per liter per day and the cost of placing an order is 50 pesos. There is a 2-daylead time for delivery. Determine the optimal inventory policy.

Answered: more than 500 liters. The garage uses…

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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If annual demand is 6,125 units, annual holding cost is $5 per unit, and setup cost per order is $50, what is the EOQ lot size?
Matthew Liotine's Dream Store sells water beds and assorted supplies. His best-selling bed has an annual demand of 405 units. Ordering cost is $38; holding cost is $5 per unit per year. a) To minimize the total cost, how many units should be ordered each time an order is placed? EOQ = units (round your response to the nearest whole number). b) If the holding cost per unit was $6.00 instead of $5, what would the optimal order quantity be? New EOQ = units (round your response to the nearest whole number). A
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more than 500 liters. The garage uses approximately 150 liters per day. Holding cos 2 pesos per liter per day and the cost of placing an order is 50 pesos. There is a 2- lead time for delivery. Determine the optimal inventory policy.