Question: 3. Upon hearing that Ross White (see Problems 6-27 and 6-28) is considering producing the brackets in-house, the vendor has notified Ross that the purchase

3. Upon hearing that Ross White (see Problems 6-27 and 6-28) is considering producing the brackets in-house, the vendor has notified Ross that the purchase price would drop from $15 per bracket to $14.50 per bracket if Ross would purchase the brackets in lots of 1,000. Lead times, however, would increase to 3 days for this larger quantity. A) What is the total annual inventory cost plus purchase cost if Ross buys the brackets in lots of 1,000 at $14.50 each? B) If Ross does buy in lots of 1,000 brackets, what is the new ROP? C) Given the options of purchasing the brackets at $15 each, producing them in-house at $14.80, and taking advantage of the discount, what is your recommendation to Ross White?

Answer in EXCEL

PLEASE SHOW ALL THE FORMULAS USED WHEN ANSWERING THE QUESTION

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

When faced with different alternatives, there are many criteria that can be used to identify the best one. What is the tangible criterion that is usually used in an engineering economic analysis?

Upon hearing that Ross White (see Problems 6-27 and 6-28) is considering producing the brackets in-house, the vendor has notified Ross that the purchase price would drop from $15 per bracket to $...

6-29. Upon hearing that Ross White (see Problems 6-27 and 6-28) is considering producing the brackets in-house, the vendor has notified Ross that the purchase price would drop from $15 per bracket to...

Upon hearing that Ross White ( see Problems 6 - 2 7 and 6 - 2 8 ) is considering producing the brackets in - house, the vendor has notified Ross that the purchase price would drop from $ 1 5 per...

Upon hearing that Ross White ( see Problems 6 - 2 7 and 6 - 2 8 ) is considering producing the brackets in - house, the vendor has notified Ross that the purchase

Upon hearing that Ross White ( see problem 6 - 2 7 and 6 - 2 8 ) is considering producing theb rackets in house, the vendor has notified Ross that the purchase price would drop from $ 1 5 per brack...

Upon hearing that Ross White (see Problems 6-25 and 6-26) is considering producing the brackets in house, the vendor has notified Ross that the purchase price would drop from $15 per bracket to...

Ross Whites Machine Shop is located in Central Trinidad and specializes in designing components for the energy industry in Trinidad and Tobago. Ross White's machine shop uses 2500 brackets during the...

After analyzing the costs of various options for obtaining brackets, Ross White ( see Problems 6 . 2 7 through 6 . 2 9 ) recognizes that although he knows that lead time is 2 days and demand per day...

6-27 & 6-28 information provided. Please help with 6-29 6-27 Ross Whites machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These...

Explain the difference between systems thinking and analytical thinking. Also, explain why both are important to a project manager.

Which organizational form would be best for the following corporate strategies? a. Developing, manufacturing, and marketing many diverse but interrelated technological products and materials b....

Although retailers have only one category of inventory for which they must budget and are not generating their own products, why could you compare their budgeting to that of a manufacturer? Please...

As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes...