1. Mason is the manager of a popular bakery in Santa Monica, and he is thinking...
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1. Mason is the manager of a popular bakery in Santa Monica, and he is thinking about improving its inventory management. Currently, the bakery faces a constant demand of 200 pounds of flour per week, for 52 weeks per year. As the flour must be carefully stored, the storage cost is estimated to be $0.1 per pound per week The bakery sources the flour from an external supplier for $5 per pound (procurement). For delivery costs, the supplier offers tiered pricing to incentivize bigger purchases. Number of pounds At most 250 pounds 251 or more Delivery cost ($/delivery) 20 10 In this question, we will help Mason figure out the optimal order quantity step by step. a. First, let's pretend that the supplier always charged $20 per delivery, no matter how many pounds were ordered. In this case, how many pounds should Mason order each time? How much would he pay in total weekly inventory costs (weekly holding cost+weekly delivery cost)? (4 points) 282.84 pounds $28.28/week b. Second, let's still pretend that the supplier always charged $20 per delivery, no matter how many pounds were ordered. But Mason can order at most 250 pounds per order. In this case, how many pounds should he order each time? How much would he pay in total weekly inventory costs (weekly holding cost + weekly delivery cost)? (4 points) 250 pounds $28.5/week c. Third, let's pretend that the supplier always charged $10 per delivery, no matter how many pounds were ordered. In this case, how many pounds should Mason order each time? How much would he pay in total weekly inventory costs (weekly holding cost+weekly delivery cost)? (3 points) 200 pounds $20/week d. Finally, let's still pretend that the supplier always charged $10 per delivery, no matter how many pounds were ordered. But Mason must order at least 251 pounds each time. In this case, how many pounds should he order each time? How much would he pay in total weekly inventory costs (weekly holding cost + weekly delivery cost)? (4 points) 251 pounds $20.52/week e. How many pounds should Mason order each time to minimize the inventory costs? (2 points) 251 pounds 1. Mason is the manager of a popular bakery in Santa Monica, and he is thinking about improving its inventory management. Currently, the bakery faces a constant demand of 200 pounds of flour per week, for 52 weeks per year. As the flour must be carefully stored, the storage cost is estimated to be $0.1 per pound per week The bakery sources the flour from an external supplier for $5 per pound (procurement). For delivery costs, the supplier offers tiered pricing to incentivize bigger purchases. Number of pounds At most 250 pounds 251 or more Delivery cost ($/delivery) 20 10 In this question, we will help Mason figure out the optimal order quantity step by step. a. First, let's pretend that the supplier always charged $20 per delivery, no matter how many pounds were ordered. In this case, how many pounds should Mason order each time? How much would he pay in total weekly inventory costs (weekly holding cost+weekly delivery cost)? (4 points) 282.84 pounds $28.28/week b. Second, let's still pretend that the supplier always charged $20 per delivery, no matter how many pounds were ordered. But Mason can order at most 250 pounds per order. In this case, how many pounds should he order each time? How much would he pay in total weekly inventory costs (weekly holding cost + weekly delivery cost)? (4 points) 250 pounds $28.5/week c. Third, let's pretend that the supplier always charged $10 per delivery, no matter how many pounds were ordered. In this case, how many pounds should Mason order each time? How much would he pay in total weekly inventory costs (weekly holding cost+weekly delivery cost)? (3 points) 200 pounds $20/week d. Finally, let's still pretend that the supplier always charged $10 per delivery, no matter how many pounds were ordered. But Mason must order at least 251 pounds each time. In this case, how many pounds should he order each time? How much would he pay in total weekly inventory costs (weekly holding cost + weekly delivery cost)? (4 points) 251 pounds $20.52/week e. How many pounds should Mason order each time to minimize the inventory costs? (2 points) 251 pounds
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