Operations Management: Sustainability and Supply Chain Management (12th Edition)
Operations Management: Sustainability and Supply Chain Management (12th Edition)
12th Edition
ISBN: 9780134130422
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 15, Problem 5DQ
Summary Introduction

To determine: The advantages and disadvantages of Shortest Processing Time (SPT) rule.

Introduction: Shortest Processing Tine is the scheduling rule, which helps to arrange the sequence in the order. Here, a job with the shortest duration would be served first. Then, the process would be going on from the shortest to largest duration

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IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $50, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule: Option Plan Quantity Discount A 1 - 299 0% B 300 - 1,199 0.50% C 1,200+ 1.50% The distributor pays $56 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 10% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 10,750 units. When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 491 Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the…
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