For the case explained in slide 46, 48, 52

1. What is the optimal order quantity for the retailer (with no discount) - already done in the slides. Just do it again yourself showing all the calculations. (1 Point) 2. What is the optimal order quantity for the manufacturer (3 points) a. Identify the demand, fixed-ordering cost, cost per unit, and holding cost for the manufacturer b. By knowing the part a values and using the formula, compute the optimal order quantity from the manufacturer's point of view 3. What is the optimal order quantity for the combined supply chain (with no discounts) - already done in the slides. Just do it again yourself showing all the calculations. (1 Point) 4. Draw a diagram similar to slide 11-46 to show the impact of the quantity discount outlined in slide 11-52 on the cost to retailer? (5 points) a. Identify the demand, fixed-ordering cost, cost per unit, and holding cost for the retailer b. Compute the total cost (Ordering cost + Holding cost + Material cost) for each possible quantity order without discount until 9,165 c. Compute the total cost (Ordering cost + Holding cost + Material cost) for each possible quantity order with discount after 9,165 (It would be enough if you consider 13,000 units as the maximum order size) d. Show that both the optimal order quantity without discount and the breaking point have the same cost by drawing the diagram

slide 48

A Quantity Discounts for Commodity Products 0 Demand for vitamins is 10,000 bottles per month. Drugs Online (DO) incurs a fixed order placement, transportation, and receiving cost of $100 each time it places an order for Vitamins with the manufacturer. 0 DO incurs a holding cost of 20 percent. The manufacturer charges $3 for each bottle of vitamins purchased. Evaluate the optimal lot size for DO. 0 Each time DO places an order, the manufacturer must process, pack, and ship the order. The manufacturer has a line packing bottles at a steady rate that matches demand. The manufacturer incurs a fixed-order filling cost of $250, production cost of $2 per bottle, and a holding cost of 20 percent. What is the annual fulfillment and holding cost incurred by the manufacturer as a result of DOS ordering policy? \fDesigning a Suitable Lot Size- . Based Quantity Discount 0 Manufacturer needs to offer an incentive of at least $264 per year to D0 in terms of decreased material cost if DO orders in lots of 9,165 units 0 Appropriate quantity discount is $3 if DO orders in lots smaller than 9,165 units and (3 264/120,000) $29978 for orders of 9,165 or more