The Goodstone Tire Company produces a brand of tirecalled the Rainpath. The annual demand at its distributioncenter is 12,400 tires per year. The transport and handlingcosts are $2600 each time a shipment of tires is ordered atthe distribution center. The annual carrying cost is $3.75per tire.a. Determine the optimal order quantity and the minimumtotal annual cost.b. The company is thinking about relocating its distributioncenter, which would reduce transport and handling coststo $1900 per order but increase carrying costs to $4.50per tire per year. Should the company relocate based oninventory costs?
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.
The Goodstone Tire Company produces a brand of tire
called the Rainpath. The annual demand at its distribution
center is 12,400 tires per year. The transport and handling
costs are $2600 each time a shipment of tires is ordered at
the distribution center. The annual carrying cost is $3.75
per tire.
a. Determine the optimal order quantity and the minimum
total annual cost.
b. The company is thinking about relocating its distribution
center, which would reduce transport and handling costs
to $1900 per order but increase carrying costs to $4.50
per tire per year. Should the company relocate based on
inventory costs?
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