Question: Problem 6 - 16 points. (Questions a, b, c, and d = 4 points each) Chipper dog kennel's estimates an annual consumption of dog food
Problem 6 - 16 points. (Questions a, b, c, and d = 4 points each) Chipper dog kennel's estimates an annual consumption of dog food at 2000 lbs. per year. The manager at Chipper dog kennel estimates a fixed cost of placing an order at $10 and holding costs estimates are based on a 15% annual interest rate. The supply company charges $50 per lb. for orders less than 500 lbs., 549 per lb. for orders of 500 or more but fewer than 1000 lbs., and $48 per lb. for orders of 1000 lbs or more. a) What is the largest realizable EOQ? b) What is the optimal order size and the annual cost associated with placing that order? c) Based on the optimal order size, how many orders are placed per year? d) Based on the optimal order size, what is the time between orders
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
