QUESTION 1: A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes. (a) How many boxes should the confectioner order so as to minimise inventory total stocking costs? (b) If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer? (c) Suppose the supplier has decided that instead of the 2% discount offer the following price breaks will be used: ORDER QUANTITY COST PER BOX Less than 100 $30.00 100 to 199 $29.75 200 or more $29.60 What order quantity should the confectioner make?
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.
QUESTION 1:
A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes.
(a) How many boxes should the confectioner order so as to minimise inventory total stocking costs?
(b) If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?
(c) Suppose the supplier has decided that instead of the 2% discount offer the following price breaks will be used:
ORDER QUANTITY COST PER BOX
Less than 100 $30.00
100 to 199 $29.75
200 or more $29.60
What order quantity should the confectioner make?
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