The dealer has allocated a budget of 23,000 TL for the transportation of the machines from the factory. Assume that the annual inventory carrying cost rate is 30 percent. Calculate the unconstrained order quantities. Are these values optimal? If not, determine the optimal quantities to be stored from each model (Hint: λ is 0.337).

Practical Management Science
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Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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A dealer of white goods buys washing machines from Arçelik. In their next order, they plan to buy two models for which the related data are as follows:
Washing machine model
Annual demand (units)
6800
8500
Ordering cost (TL)
125
125
Unit purchasing cost (TL)
2400
1900
Transportation cost per unit (TL)
250
220
The dealer has allocated a budget of 23,000 TL for the transportation of the machines from the factory. Assume that the annual inventory carrying cost rate is 30 percent.
Calculate the unconstrained order quantities. Are these values optimal? If not, determine the optimal quantities to be stored from each model (Hint: 2 is 0.337).
Transcribed Image Text:A dealer of white goods buys washing machines from Arçelik. In their next order, they plan to buy two models for which the related data are as follows: Washing machine model Annual demand (units) 6800 8500 Ordering cost (TL) 125 125 Unit purchasing cost (TL) 2400 1900 Transportation cost per unit (TL) 250 220 The dealer has allocated a budget of 23,000 TL for the transportation of the machines from the factory. Assume that the annual inventory carrying cost rate is 30 percent. Calculate the unconstrained order quantities. Are these values optimal? If not, determine the optimal quantities to be stored from each model (Hint: 2 is 0.337).
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