Question: H.R. Prewett Limited forecasts the demand for one component to average 18 a day over a 200-day working year. If there are any shortages, production

H.R. Prewett Limited forecasts the demand for one component to average 18 a day over a 200-day working year. If there are any shortages, production will be disrupted with very high costs. The total cost of placing an order is £800 and holding costs are £400 a unit a year. What is the best inventory policy for the component? How does this compare with the option of making the component internally at a rate of 80 units a day?

Step by Step Solution

★★★★★

3.40 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Listing the variables given in consistent units D 18200 3600 units a ye... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

180-M-S-Q-M (404).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!

What ensures fidelity in protein synthesis? How does this compare with the fidelity of replication and transcription?

On the foreign exchange market, the demand for one currency is closely connected to the supply of another. Do you agree or disagree? Explain.

Explain why the demand for one currency implies the supplying of another currency.

informs Vol. 34, No. 3, May-June 2004, pp. 191-205 issn 0092-2102 \u0001 eissn 1526-551X \u0001 04 \u0001 3403 \u0001 0191 doi 10.1287/inte.1030.0068 2004 INFORMS Inventory Decisions in Dell's Supply...

The University of Southern Mississippi College of Science & Technology IET 670 Section: G001 Supply Chain Design & Management Midterm Exam Full Points: 100 Student ID: Name: Closed book closed notes...

scm321 Exercises 1. Skycell, a major European cell phone manufacturer, is making production plans for the coming year. Skycell has worked with its customers (the service providers) to come up with...

Lecture Notes DL MGT 5100 - Distribution Management Spring 2017 1.0. Day one, Monday, Monday, 9 Jan 17 1.1. Reading Assignments: Chapters 1 and 2 1.1.1. I intend to follow the book so as to provide a...

An organization'spurpose and respective strategy are influenced by its stakeholders. Use the relevant dimensions of Figure 5.2 to identify the main stakeholders for Volkwagen'selectric vehicle...

The inner and outer surfaces of a 0.5-cm-thick, 2-m = 2-m window glass in winter are 10C and 3C, respectively. If the rate of heat loss through the window is 3.2 kJ/s, determine the amount of heat...

Sally hires a maid to work in her home for $1,775 per month. The maid is 25 years old and not related to Sally. During 2016, the maid worked 8 months for Sally. Do not round immediate computations...

The quick ratio is computed just like the ratio, except that inventory is omitted.

13. The assets and liabilities are fairly valued on the balance sheet. Alfa and Beda decide to admit Capp as a new partner with 20% interest. No goodwill or bonus is to be recorded. What amount...

Data for the progression of college students at a particular college are summarized in the following matrix of transition probabilities. a. What states are absorbing states? b. Interpret the...

The game of blackjack (sometimes called 21) is a popular casino game. The goal is to have a hand with a value of 21 or as close to 21 as possible without exceeding 21. The player and the dealer are...

The Mohawk Discount Store is designing a management training program for individuals at its corporate headquarters. The company wants to design the program so that trainees can complete it as quickly...

The Collins Company, expertly run by Mr. Collins who is the CEO, CFO, and Chairman of the Board, on which a couple of his very good friends sit, needs to expand its production. Current sales are...

Jarett & Sons's common stock currently trades at $21.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (D1 = $2.50), and the constant growth rate is 8% a...

The tax rates are as shown. What is the average tax rate for a firm with taxable income of $131,513? 37.16% 39.00% 20.00% 28.75% 26.26%