Question: The Pedal Pusher Bicycle Shop operates 7 days per week
The Pedal Pusher Bicycle Shop operates 7 days per week, closing only on Christmas Day. The shop pays $300 for a particular bicycle purchased from the manufacturer. The annual holding cost per bicycle is estimated to be 25% of the dollar value of inventory. The shop sells an average of 25 bikes per week. Frequently, the dealer does not have a bike in stock when a customer purchases it, and the bike is back-ordered. The dealer estimates his shortage cost per unit backordered, on an annual basis, to be $250 due to lost future sales (and profits). The ordering cost for each order is $100. Determine the optimal order quantity and shortage level and the total minimum cost.
Answer to relevant QuestionsThe Petroco Company uses a highly toxic chemical in one of its manufacturing processes. It must have the product delivered by special cargo trucks designed for safe shipment of chemicals. As such, ordering (and delivery) ...In Problem 1 in Chapter 15, the Saki motorcycle dealer in Minneapolis–St. Paul orders the Saki Super TXII motorcycle it sells from the manufacturer in Japan. Using the 3-month moving average forecast of demand for January ...Videoworld is a discount store that sells color televisions. The annual demand for color television sets is 400. The cost per order from the manufacturer is $650. The carrying cost is $45 per set each year. The store has an ...The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet. The annual carrying cost for a yard of this carpet is $0.75, and the ordering cost is $150. The carpet manufacturer normally charges ...Determine the optimal order quantity and total annual inventory cost for cups in Problem 34 if the carrying cost is 5% of the price of a box of cups.
Post your question