Concept explainers
Introduction:
Company U produces health care appliances for hospitals and homes. It is producing testing kit to test blood pressure. Company U purchases the display unit from a supplier for five years.
The supplier with which Company U is purchasing the display kit was bought out by another supplier who cancelled the six-week ordering system. However the manager of the purchasing department Person TC is not in the idea of changing the ordering system.
Person TC describes that it takes $32 to order and receive the shipment and the company assembles 89 kits a week and the weekly carrying cost is 0.08 per unit.
To recommend: Any changes to optimal order interval.
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Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
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- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning