Question: Green Bay Lumber and Mill ( GBLM ) processes 1 0 , 0 0 0 logs annually, operating 2 5 0 days per year. Immediately
Green Bay Lumber and Mill GBLM processes logs annually, operating days per year. Immediately upon receiving an order, the logging company's supplier begins delivery to the lumber mill at the rate of logs per day. The lumber mill has determined that the ordering cost is $ per order, and the cost of holding logs in inventory before they are processes is $ per log on the annual basis. Determine the following:
The optimum order size
The total of annual inventory holding and ordering costs
If another supplier suggests that they can deliver at the rate of logs per day with the same ordering and holding costs,
should GBLM accept this suggestion?
Show work and for all calculations round up two decimal places.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
