Question: A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One

A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One of the consoles has a steady demand and it is fairly steady.Assume that the retail shop has two types of consoles.

The first type has

Demand = 1400 per year; Cost per unit = $400; holding cost = 10% of the unit cost/per year; Ordering cost = $600 per order

The second type has

Demand = 1000 per year; Cost per unit = $500; holding cost = 10% of the unit cost/per year; Ordering cost = $600 per order

The manager wants to aggregate the two products for joint shipping. The combined ordering cost = $800 per order.

Estimate the optimal number of joint orders per year.
Find the order quantities for both the products.

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!

ABC Corp. is considering leasing an asset from XYZ Corp. Here are the relevant facts: ABC's interest costs are 10% and XYZ's interest costs are 7% Find the Maximum rental that ABC will pay and the...

A supply chain manager is trying to reduce her inventory costs by coming up with better ordering policies. The retail shop sells gaming consoles. One of the consoles has a steady demand and it is...

Name: 1. Based on the case description about Walmart and Amazon, please identify five forces "who they are and analyze the role of IT" as to how IT contributes to increase the competitiveness of the...

JOURNAL OF BUSINESS AND MANAGEMENT Vol. 4, No. 7, 2015: 830-843 MANAGING STOCK IN WAREHOUSE: A CASE STUDY OF A RETAIL INDUSTRY IN JAKARTA Yericho Paul and Yuliani Dwi Lestari School of Business and...

CASE 1 Walmart is the worlds largest and most successful retailer, with more than $485 billion in 2016 sales and nearly 11,700 stores worldwide, including more than 4,600 in the United States....

Case: Walmart is the worlds largest and most successful retailer, with more than $485 billion in 2016 sales and nearly 11,700 stores worldwide, including more than 4,600 in the United States. Walmart...

Subject: POM Q 4 Refer to below following answer the question:- 4. With relation to the case study, Toyota had sustained their competitive edge due to effective inventory management. a) Explain the...

Based on two decades of the world's best academic and industry research, this guide answers the question: How can companies innovate to become financially, environmentally and socially sustainable?...

Martinez Manufacturing Inc. showed the following costs for last month: Direct materials ...........$7,000 Direct labor .............. 3,000 Manufacturing overhead ......... 2,000 Selling expense...

Sam Kerridge is a music teacher and a lover of music. He has recently received an inheritance of 120,000. He has decided to open a caf bar called Peyton Place. He plans to sell drinks and food, and...

What is the impact rating for calculating risk when, you: Goods for cost - benefit analysis

Case Greenbuilders Pte Lid ("GPL") is a local construction company which specialises in providing bespoke Design and Build construction services for private residential homes that are designed to be...