Problem 20-39 (Algo)CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, tomeet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and otherdata for the problem:Price of copperAnnual demandHolding costOrdering cost$0.82 per pound up to 2,999 pounds0.81 per pound for orders between 3,000 and 5,999 pounds$0.79 per pound for orders 6,000 pounds or greater48,000 pounds per year30 percent per unit per year of the price of the copper30Which quantity should be ordered?Quantitypounds

Step 1:Therefore the quantity should be ordered is 6000 pounds.

Answered: Problem 20-39 (Algo) CU, Incorporated…

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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The distribution manager for Divine Corporation is trying to establish the most economic ordering policy for the standard model of its best-selling microwave oven. He has control of the finished goods warehouse for the factory and must satisfy wholesaler demand. The following information is available: Wholesale Value $100 Annual Demand 50,000 units Standard Deviation of Demand 30 units per day Working Year 250 days Production Lead Time 9 days Ordering Cost for Production $1,800 Holding Cost per unit per year 20% of value Desired Service Level 96 percent If Divine decides to use a continuous review system, what should be economic order quantity, safety stock, and the reorder point? If on the other hand, Divine wishes to use the periodic review system, what should be the safety stock, reorder point? If the current on hand inventory is 1,000 units, how many units should be ordered?
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