Question: Please type the answer by computer, so i can see it clearly, thank you!!!! A pain reliever and fever reducer is produced by a medicine
Please type the answer by computer, so i can see it clearly, thank you!!!!
A pain reliever and fever reducer is produced by a medicine producer in the United States of America. A supplier in China supplies this corporation with two medication ingredients: paracetamol powder and maize starch. The table below shows the demand and costs for each ingredient.
The Economic Order Quantity (EOQ) model's assumptions are met. Note that the fixed cost per order for each ingredient includes both common and product-specific ordering expenses, which are used into the EOQ calculation. Display the calculation's units and steps.
Question:
The supplier offers an all-unit quantity discount to entice the medication maker to purchase more paracetamol powder per order. A 1% discount on the price per kg is granted if the purchasing lot size is 2,000 kg or more. For paracetamol powder, the annual holding cost per kg is 5% of the unit price. In this instance, paracetamol powder will not be purchased in a lot with maize starch.
1(a) If the drug manufacturer does not want to take the discount offer, determine the EOQ based on the order quantity, the regular price, and the total annual cost (i.e., the sum of annual purchase, ordering and holding costs) for purchasing paracetamol powder INDEPENDENTLY.
1(b) If the drug manufacturer wants to accept the discount offer, determine the EOQ based on the discounted price (keep one decimal place), the order quantity, and the total annual cost (i.e., the sum of annual purchase, ordering and holding costs) for purchasing paracetamol powder INDEPENDENTLY.
1(c) From a logistics managers point of view, discuss TWO factors that the drug manufacturer should consider for the adoption of the order quantity with the discount offer.
Annual demand Unit price Common ordering cost Product-specific ordering cost Holding cost per kg per year Paracetamol powder Maize starch 10,000 kg 5,000 kg $800/kg $400/kg $360/order $140/order $125/order 5% of the unit price 5% of the unit priceStep by Step Solution
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