The orange company prices J-Pods at $550 per unit. Good Buy sells the J-Pods at $775. Annual
Question:
The orange company prices J-Pods at $550 per unit. Good Buy sells the J-Pods at $775. Annual demand at this retail price turns out to be 450,000 units. Good Buy incurs ordering, receiving, and transportation costs of $10,000 for each lot of J-Pods ordered. The orange company needs to pay $15000 for each order shipped. The holding cost used by the Orange company and Good Buy is 20 percent.
a) If the orange company and Good Buy collaborate and care about each other's costs, what is the optimal quantity for the Jerk Store to order?
b) If the orange company and Good Buy collaborate and care about each other's costs, what is the total cost for George and Jerk?
c) If the Good Buy Store acts independently, what is its optimal ordering quantity?
d) If the Good Buy Store acts independently, what are its ordering and inventory costs?
e) How much reduction or increase is there in the costs for Good Buy if it acts independently?
f) Design an all-unit quantity discount that results in Good Buy ordering the quantity in part a.
Supply Chain Management Strategy Planning And Operation
ISBN: 9781292257891
7th Global Edition
Authors: Sunil Chopra