Company B is a retailer of mobile phones in Australia that works 250 days in a year.
Question:
Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager is determining a minimum-cost inventory plan for an upcoming phone to be launched in the market. She has collected the following information:
• Annual demand: 900 phones
• Phone cost: $1,079 each
• Phone RRP: $1,199 each
• Net weight: 163 g each
• Tare weight: 277 g each
• Annual inventory holding cost: 15%
• Cost per order to replenish inventory: $75
• Annual in-transit holding cost: 10%
• Freight rate: $7.50 per kg
• Time to process order for freight: 1 days
• Freight transit time: 3 days
Solve this problem using a non-linear programming (NLP) model to determine the followings:
a. Economic order quantity for the phone in units and in kg
b. The total cost for purchasing the phones
c. The total cost for ordering
d. The total cost for holding the inventory
e. The total cost for transportation
f. The total cost for holding the phones during transit
g. The total cost for this inventory plan
h. The number of orders
i. Ordering point
j. The profit from this inventory plan
Expert Answer:
ANSWER aEconomic order quantity for the phone in units and in kg EOQ Square root 2x Annual demand x ... View the full answer
