Question: MATHIMATICALLY SOLVE FOR EACH IN TERMS OF SUPPLY CHAIN 5 - A soap manufacturer has dedicated a plant for one major retail chain. Sales at
MATHIMATICALLY SOLVE FOR EACH IN TERMS OF SUPPLY CHAIN A soap manufacturer has dedicated a plant for one major retail chain. Sales at the retail chain average about jugs of soap a month and production at the plant keeps pace with this average demand. Each jug of soap costs the manufacturer and is sold to the retailer at a wholesale price of Both the manufacturer and the retailer use an annual holding cost of percent of unit cost. For each order placed, the retailer incurs an ordering cost of The manufacturer incurs the costs of transportation and loading that total per order shipped.
a Given that the retailer is trying to minimize its inventory costs ordering cost holding cost what lot size will it ask for in each order? What are the annual ordering and holding costs of the manufacturer, retailer and supply chain as a result of this policy?
b What lot size minimizes the inventory costs across both the manufacturer and the retailer supply chain How much will this policy change the manufacturers the retailers and the supply chains inventory costs relative to a
c Design an allunit quantity discount that results in the retailer ordering the lot size in b
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