Question
The demand for E-Chupetin47 is very stable at 7900 units per month with virtually no variability. BabyGear pays $20 for each pacifier, and sells each
The demand for E-Chupetin47 is very stable at 7900 units per month with virtually no variability. BabyGear pays $20 for each pacifier, and sells each unit for $35. The annual holding rate for these pacifiers is 20%, and the administrative cost associated with placing an order is $350. The company is currently ordering exactly the monthly demand, 7900 units of E-Chupetin47, the first day of each month.
Assume no lead time. Assume 52 weeks per year.
1)What is the current total annual relevant cost (ordering+holding costs) for E-Chupetin47?
2.1)What would be the optimal order quantity for E-Chupetin47?
2.2)What would be the time between orders for this optimal policy (in weeks)?
2.3)What would be the total annual relevant cost associated to this optimal policy (ordering+holding costs)?
3.This new system would automate manual tasks and reduce the administrative cost of placing an order to $200. What would be the impact of implementing this ordering system on the optimal policy thatcalculated in Question 2?
3.1)Optimal order quantity...
3.2)Purchasing cost...
3.3)Ordering cost...
3.4)Holding cost...
4.The supplier for E-Chupetin47 is working on a new line of pacifiers and is offering the E-Chupetin47 at a discount rate of $18 only during the current month.
they should order at the discount rate? If so, how many units should they order?
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Understanding the Problem Were tasked with optimizing the inventory management for a productEChupetin47considering ordering and holding costsWell calculate the current total costfind the optimal order ...Get Instant Access to Expert-Tailored Solutions
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