A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.10 per stone for quantities of 600 stones or more, $8.50 per stone for orders of 400 to 599 stones, and $9.00per stone for lesser quantities. The jewelry firm operates 160 days per year. Usage rate is 18stones per day, and ordering costs are $38.  a. If carrying costs are $1 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.)

Optimal order quantity? ___________ stones (note the answer is not 468 or 405)

b. If annual carrying costs are 15 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.)

Optimal order quantity? ___________ stones (note the answer is not 468 or 405)

c. If lead time is 2 working days, at what point should the company reorder? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) Reorder quantity? __36____ stones (correct answer)

Answer rating: 100% (QA)

a Optimal order quantity with carrying cost of 1 per stone per year To find the optimal order quanti... View the full answer