The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer. ≻For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece. ≻If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece. ≻5,001 to 10,000 pieces brings the price to $1.40/piece, and ≻10,001 and above reduces the price to $1.25/piece. Lisa's order costs are $205 per order, her annual holding costs are 5%, and the annual demand is 45,100 pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range): Part 2 a) What is the optimum ordering quantity? enter your response here units (round your response to the nearest whole number). Part 3 b) What is the annual holding cost? $enter your response here (round your response to two decimal places). Part 4 c) What is the annual ordering cost? $enter your response here (round your response to two decimal places). Part 5 d) What are the annual costs of the silverware itself with an optimal order quantity? $enter your response here (round your response to the nearest whole number). Part 6 e) What is the total annual cost, including ordering, holding, and purchasing the silverware? $enter your response here (round your response to two decimal places).
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer. ≻For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece. ≻If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece. ≻5,001 to 10,000 pieces brings the price to $1.40/piece, and ≻10,001 and above reduces the price to $1.25/piece. Lisa's order costs are $205 per order, her annual holding costs are 5%, and the annual demand is 45,100 pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range): Part 2 a) What is the optimum ordering quantity? enter your response here units (round your response to the nearest whole number). Part 3 b) What is the annual holding cost? $enter your response here (round your response to two decimal places). Part 4 c) What is the annual ordering cost? $enter your response here (round your response to two decimal places). Part 5 d) What are the annual costs of the silverware itself with an optimal order quantity? $enter your response here (round your response to the nearest whole number). Part 6 e) What is the total annual cost, including ordering, holding, and purchasing the silverware? $enter your response here (round your response to two decimal places).
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
The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer.
≻For
a small order
(2,000
pieces or less) her vendor quotes a price of
$1.80/piece.
≻If
she orders
2,001
to
5,000
pieces, the price drops to
$1.60/piece.
≻5,001
to
10,000
pieces brings the price to
$1.40/piece,
and≻10,001
and above reduces the price to
$1.25/piece.
Lisa's order costs are
$205
per order, her annual holding costs are
5%,
and the annual demand is
45,100
pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range):Part 2
a) What is the optimum ordering quantity?
enter your response here
units (round your response to the nearest whole number).Part 3
b) What is the annual holding cost?
$enter your response here
(round your response to two decimal places).Part 4
c) What is the annual ordering cost?
$enter your response here
(round your response to two decimal places).Part 5
d) What are the annual costs of the silverware itself with an optimal order quantity?
$enter your response here
(round your response to the nearest whole number).Part 6
e) What is the total annual cost, including ordering, holding, and purchasing the silverware?
$enter your response here
(round your response to two decimal places).Expert Solution
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