Sphere foods company produces a candy called little Stars, a bag of dozen, individually wrapped, star-shaped candies
Question:
Sphere foods company produces a candy called "little Stars," a bag of dozen, individually wrapped, star-shaped candies made primarily from a blend chocolate, macadamia nuts, and a blend of heavy cream fillings. The candy is shipped in cases with 160 bags of candy per case. it has collected demand data ( i.e..., cases sold) from stores it supplies for the past four years, as shown in the accompanying table.
Year Demand ( cases)
1 2706
2 2968
3 3180
4 3350
Each case of candy weighs 120 Ibs. Each candy is made with 405 chocolates, 30% nuts and 30% heavy cream.
The company orders chocolate, nuts, and filling from its preferred suppliers by pound.
the ordering cost for chocolate is $5700 and the carrying cost is $ 0.45 per pound per year. The ordering cost for macadamia nuts is $6300, and the annual carrying cost is $ 0.63 per pound per year. The ordering cost for filling is $ 4500, and the annual average carrying cost is $0.55 per pound per year. ( 1 pound = 16 ounces)'
each of the suppliers offers the candy manufacturer a Quantity-discount schedule for the ingredients as follows;
Chocolate Macadamia Nuts Filling
cost Quantity ( Ibs) cost Quantity ( Ibs) cost Quantity ( Ibs)
$ 3.05 0-49,999 $ 6.50 0-29,999 $ 1.50 0-39,999
2.9 50,000-99,999 6.25 30,000-69,999 1.35 40,000-79,999
2.75 100,000 + 5.95 70,000 + 1.25 80,000 +
(a). Forecast demand for year 5 using the linear regression
( b). Calculate the total annual requirements for each ingredient from the annual demand forecast.
( c ). Determine the inventory order quantity for each of the three ingredients ordered from its suppliers.
( d). Calculate the total inventory cost ( including purchase cost) for the year to meet the annual demand.
Expert Answer:
Certainly Lets break down the problem step by step a Forecast Demand for Year 5 Using Linear Regression Well use the given demand data for the past fo... View the full answer
