Coral Gables' restaurant serves real maple syrup with French toast and pancakes. The manager buys the...
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Coral Gables' restaurant serves real maple syrup with French toast and pancakes. The manager buys the maple syrup from a company in Boston that requires three weeks for delivery. The syrup costs the restaurant $4 a bottle and may be purchased in any quantity. Fixed costs of ordering amount to about $75 for bookkeeping expenses, and holding costs are based on a 20 percent of the unit cost. The manager estimates that the loss of customer goodwill for not being able to serve the syrup when requested amounts to $25. Based on past experience, the weekly demand for the syrup is normal with mean 12 and variance 16 (in bottles). For the purpose of calculations, you may assume that there are 52 weeks in a year. a. How large an order should the manager be placing with the supplier for the maple syrup, and what would be the reorder point? In other words, what are the best Q and R? Coral Gables' restaurant serves real maple syrup with French toast and pancakes. The manager buys the maple syrup from a company in Boston that requires three weeks for delivery. The syrup costs the restaurant $4 a bottle and may be purchased in any quantity. Fixed costs of ordering amount to about $75 for bookkeeping expenses, and holding costs are based on a 20 percent of the unit cost. The manager estimates that the loss of customer goodwill for not being able to serve the syrup when requested amounts to $25. Based on past experience, the weekly demand for the syrup is normal with mean 12 and variance 16 (in bottles). For the purpose of calculations, you may assume that there are 52 weeks in a year. a. How large an order should the manager be placing with the supplier for the maple syrup, and what would be the reorder point? In other words, what are the best Q and R?
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2 x52 12x52 624 units u 7 12x3 36 units Jo VT V16 3 69... View the full answer
Related Book For
Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
Posted Date:
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