NiceShoes retail store sells one model of casual shoes all around the year. The demand for this model hasan approximate constant rate of 750 pairs every three months. The store incurs an ordering cost of $ 75and a holding cost of 20%. The supplier offers NiceShoes the following price structure.Which order quantity results in the lowest cost?Quantity1 - 249250-349350 - 4992 500Price$40$38$36$343.1. Which order quantity results in the lowest cost?

Given data: Demand =750 pairs every three months. Then Annual Demand (D)= 750×4 = 3000 units…

Answered: NiceShoes retail store sells one model…

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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Currently, a company places orders for diaries to give away as tokens for its customers. Each diary costs the company $137.50. It costs the company $0.65 to place an order for the diaries and $0.87 to carry each diary annually in its inventory. The suppliers wish to offer the company a deal on the cups, by having it pay $85 for each diary, but ONLY if the company orders in sizes of 500 instead of the usual amount. Annual demand for the cups is 8000. Should the company accept the deal?
A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspaper costs $1.17 per unit and sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with μ = 150 and a = 30. (a) What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.) (b) What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.) (c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) What happens to the coffee shop's order quantity as the rebate is reduced? The higher rebate ---Select-- the quantity that the coffee shop should order.
A retailer anticipates selling 5,400 units of its product at a uniform rate over the next year. Each time the retailer places an order for æ units, it charged a flat fee of $100. Carrying costs are $27 per unit per year. How many times should the retailer reorder each year and what should be the lot size to minimize inventory costs? What is the minimum inventory cost? Use the formula EOQ to obtain your answers. They should order units The minimum inventory cost is $ times a year.
I run a Ford car dealership, and I experience known and constant demand for cars. I sell 10,000 cars annually. The cost of ordering is $1,108, and the annual cost of holding a car on the lot is $500. What is the economic ordering quantity (EOQ)? Round to the nearest whole number (so if your answer is 443.363, round to 443)
KickBites Manufacturing has a demand for 1,000 pumps each year. The cost of a pump is $50. It cost KickBites Manufacturing $40 to place an order, and the carrying cost is 25% of the unit cost. If pumps are ordered in quantities of between 200 and 250, KickBites Manufacturing can get a discount on the cost of the pumps. Should the company order 200 pumps or 250 pumps at a time and take the 3% discount? [Provide your answers in two decimal points]
An electronic store uses continuous review policy to manage the inventory of its high selling monitor model. The monitor has the following characteristics. The annual demand for the monitor is (4000 *2) units per week. The monitors are bought from an offshore supplier at a unit price of 7000 AED per unit and each order costs 80000 AED. The holding cost of laptops is 25% of the value of the product. Calculate the annual demand using the no 2 What is the economic order quantity? EOQ? What would be the average number of orders in a week? What would be the average time between orders (in weeks)? What would be the average inventory level? The electronic store is considering a local supplier. The ordering cost of the new supplier is 65000 AED however the unit price of the monitor is 9000 AED. Should the electronic store change its supplier?
We have demand for a product with 1500 units/ month. The vendor offers. quantity discounted method for purchasing as the table below: Order Quantity condition Price (USD) 1+299 10 >300 7 Ordering lead-time is 3 days. Ordering cost 10 $/ order, salary for ordering staff is 3S/ order. Monthly Warehouse renting free is 5%, and interest rate is 7%. Salary for warehousing staff is 300$/month. Please suggest the best ordering policy. I
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Oretailer of white goods buys small appliances from a supplier. Their line includes rwo types of appliances for which the related data are as follows: Appliance type 2. Annual demand (units) 5235 4850 Ordering cost (TL) 125 125 Enit purchasing cost (TL) 35 25 The retailer has allocated a budget of 22,000 TL for thas procurement Assume that the aunual inventory carrying cost rate is 20 percent Caleulnte the unconstramed order quantities Are these values optimal? If not detemine the optimal quantities to be purchased from each appliance type (Hat. 0056)
Annual demand for a product is 11,960 units; weekly demand is 230 units with a standard deviation of 50 units. The cost of placing an order is $125, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.80 per unit. To provide a 98 percent service probability, what must the reorder point be? Suppose the production manager is told to reduce the safety stock of this item by 125 units. If this is done, what will the new service probability be?
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