Homework Help is Here – Start Your Trial Now!
Business
Operations Management
XYZ company is a subcontractor of the ABC company. XYZ manufactures items and directly sells them to ABC co where ABC re excess inventory. Annual demand D-20000 units. Setup (ordering) t S- $150. Namely, whenever a batch is to be produced for fine- ing all equipments a cost of $100 is incurred. Due to economy of le, a special contract has been signed between ABC and XYZ where prices depend on the quantity purchased by XYZ.CO

XYZ company is a subcontractor of the ABC company. XYZ manufactures items and directly sells them to ABC co where ABC re excess inventory. Annual demand D-20000 units. Setup (ordering) t S- $150. Namely, whenever a batch is to be produced for fine- ing all equipments a cost of $100 is incurred. Due to economy of le, a special contract has been signed between ABC and XYZ where prices depend on the quantity purchased by XYZ.CO

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...
See similar textbooks
icon
Related questions
Question

Need...all...

Q2) XYZ company is a subcontractor of the ABC company. XYZ co. manufactures items and directly sells them to ABC co where ABC store excess inventory. Annual demand D-20000 units. Setup (ordering) cost S- $150. Namely, whenever a batch is to be produced for fine- tuning all equipments a cost of $100 is incurred. Due to economy of scale, a special contract has been signed between ABC and XYZ where unit prices depend on the quantity purchased by XYZ co: Quantity 0-2499 2500-3199 3200- Discount 1 2 3 Unit Price (P) $5 $4 $3 The holding costs are also charged to XYZ company, with the formula H-IxP where P is the unit price and I - 20% as the adjusted interest rate. Moreover, the daily production rate of the ABC company is p-15 units/day and the daily demand rate of the XYZ company is d-10 units/day. a) Compute the production order quantities with discounts. Show computations b) Compute total costs
Transcribed Image Text:Q2) XYZ company is a subcontractor of the ABC company. XYZ co. manufactures items and directly sells them to ABC co where ABC store excess inventory. Annual demand D-20000 units. Setup (ordering) cost S- $150. Namely, whenever a batch is to be produced for fine- tuning all equipments a cost of $100 is incurred. Due to economy of scale, a special contract has been signed between ABC and XYZ where unit prices depend on the quantity purchased by XYZ co: Quantity 0-2499 2500-3199 3200- Discount 1 2 3 Unit Price (P) $5 $4 $3 The holding costs are also charged to XYZ company, with the formula H-IxP where P is the unit price and I - 20% as the adjusted interest rate. Moreover, the daily production rate of the ABC company is p-15 units/day and the daily demand rate of the XYZ company is d-10 units/day. a) Compute the production order quantities with discounts. Show computations b) Compute total costs
Expert Solution
steps

Step by step

Solved in 4 steps with 12 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE 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.
SEE MORE TEXTBOOKS