OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
14th Edition
ISBN: 9781260961393
Author: Stevenson
Publisher: MCG
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Chapter 11, Problem 9P

Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information.

Chapter 11, Problem 9P, Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an

Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero. Develop a plan that minimizes total cost. No back orders are allowed. Regular capacity = Regular production.

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The annual demand for water bottles at Mega Stores is 500 units, with an ordering cost of Rs. 200 per order. If the annual inventory holding cost is estimated to be 20%. of unit cost, how frequently should he replenish his stocks? Further, suppose the supplier offers him a discount on bulk ordering as given below. Can the manager reduce his costs by taking advantage of either of these discounts? Recommend the best ordering policy for the store. Order size Unit cost (Rs.) 1 – 49 pcs. 20.00 50 – 149 pcs. 19.50 150 – 299 pcs. 19.00 300 pcs. or more 18.00
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OPERATIONS MANAGEMENT

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