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Question 23 A large producer of household products purchases a glyceride used in one of its deodorant soaps from outside of the company at a cost of $2.5 per pound. It uses the glyceride at a fairly steady rate of 40 pounds per month, and the company uses a 23 percent annual interest rate to compute holding costs. The chemical can be purchased from a supplier who charges a delivery fee that varies on the ordering quantity as follows: Order Size Delivery Fee EOQ OsQs500 $25 501sQs1,000 $35 1,001sQ $40 Assume that the cost of order processing is $150 per order. Please calculate the EOQs corresponding to each of the delivery fees. (Please round off and keep two decimal places, e.g., 0.345 should be rounded up to 0.35, while 0.344 should be rounded down to 0.34)

Question 23 A large producer of household products purchases a glyceride used in one of its deodorant soaps from outside of the company at a cost of $2.5 per pound. It uses the glyceride at a fairly steady rate of 40 pounds per month, and the company uses a 23 percent annual interest rate to compute holding costs. The chemical can be purchased from a supplier who charges a delivery fee that varies on the ordering quantity as follows: Order Size Delivery Fee EOQ OsQs500 $25 501sQs1,000 $35 1,001sQ $40 Assume that the cost of order processing is $150 per order. Please calculate the EOQs corresponding to each of the delivery fees. (Please round off and keep two decimal places, e.g., 0.345 should be rounded up to 0.35, while 0.344 should be rounded down to 0.34)

Practical Management Science
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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Question 23 A large producer of household products purchases a glyceride used in one of its deodorant soaps from outside of the company at a cost of $2.5 per pound. It uses the glyceride at a fairly steady rate of 40 pounds per month, and the company uses a 23 percent annual interest rate to compute holding costs. The chemical can be purchased from a supplier who charges a delivery fee that varies on the ordering quantity as follows: Order Size Delivery Fee EOQ 0<Q-500 $25 501 Q 1,000 $35 1,001sQ $40 Assume that the cost of order processing is $150 per order. Please calculate the EOQs corresponding to each of the delivery fees. (Please round off and keep two decimal places, e.g., 0.345 should be rounded up to 0.35, while 0.344 should be rounded down to 0.34)
Transcribed Image Text:Question 23 A large producer of household products purchases a glyceride used in one of its deodorant soaps from outside of the company at a cost of $2.5 per pound. It uses the glyceride at a fairly steady rate of 40 pounds per month, and the company uses a 23 percent annual interest rate to compute holding costs. The chemical can be purchased from a supplier who charges a delivery fee that varies on the ordering quantity as follows: Order Size Delivery Fee EOQ 0<Q-500 $25 501 Q 1,000 $35 1,001sQ $40 Assume that the cost of order processing is $150 per order. Please calculate the EOQs corresponding to each of the delivery fees. (Please round off and keep two decimal places, e.g., 0.345 should be rounded up to 0.35, while 0.344 should be rounded down to 0.34)
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