You are running a very high end grocery store and the estimated weekly demand for ribeye is estimated to be D(p)=300-5p pounds, where p is the price per pound. The cost of purchasing one pound of rib-eye from your supplier is $15. Your store has enough capacity for 200 pounds of ribeye in special controlled temperature rooms. Maintaining these rooms costs you $2000 per year. Unfortunately, due to the high standards of your clientele, the meat can stay in your warehouse for at most one week. Shipping from your supplier costs $3 per pound with a fixed cost of $100 per shipment.

a. What is the optimal price?

b. How much are your annual Ordering (Setup) costs?

c. How much are you paying on purchasing the meat in a year?

d. Are you using your full warehouse potential in storing the ribeye?

e. Did your purchasing or ordering cost change?

f. How much do you pay in storage?

Answer rating: 100% (QA)

a Selling price p Dp 3005p Unit Cost 15 Shipping cost 3 Fixed cost 2000 ... View the full answer