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Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 40 cases. Millennium purchases each case for $110, there is a $275 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 25 percent. Assume 52 weeks per year. a. What order quantity minimizes Millennium's annual ordering and holding costs? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Order quantity b. If Millennium chooses to order 300 cases each time, what is the sum of its annual ordering and holding costs? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Costs cases c. If Millennium chooses to order 125 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Costs per case Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 40 cases. Millennium purchases each case for $110, there is a $275 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 25 percent. Assume 52 weeks per year. a. What order quantity minimizes Millennium's annual ordering and holding costs? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Order quantity b. If Millennium chooses to order 300 cases each time, what is the sum of its annual ordering and holding costs? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Costs cases c. If Millennium chooses to order 125 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Costs per case
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Related Book For
Matching Supply with Demand An Introduction to Operations Management
ISBN: 978-0073525204
3rd edition
Authors: Gerard Cachon, Christian Terwiesch
Posted Date:
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