to determine the total cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year

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...
icon
Related questions
icon
Concept explainers
Topic Video
Question

Scenario 14.1 — Vidalia Onions

When Vidalia onions are ready, the entire 13 county (plus parts of seven other counties) area in Georgia where they are grown is devoted to the harvest, packaging and shipping of this delicacy. The Onion Shack currently purchases 120,000 bags of onions each year at a price of $100 per bag (a bag is ten pounds). Onion Shack has historically purchased in lots of 3000 bags. Transit time and capacity vary as indicated in the table (lead time is 2 days more than transit time). The safety inventory that Onion Shack requires is 30% of lead time demand and the holding cost for a bag is 15% of cost.

Carrier Quantity Shipped (cwt) Quantity shipped (bags) Shipping cost ($/cwt) Transit time (days)
Mashburn Rail 200+ 2000+ $2.10 5
Sylvia Express 100+ 1000+ $2.35 3
Anita Enterprises 250+ 2500+ $1.35 3
Smith Trucking 250+ 2500+ $1.00 3

 

Use Scenario 14.1 to determine the total cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.
Group of answer choices
$32,400
$95,535
$144,000
$72,990
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Inventory management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.