You run a Ramen wholesaler. Sales at your wholesaler average about 20,000 boxes a month and you order an amount equals to the sales volume.

You are supplied from a Ramen manufacturer by truck. A truck driver charges you $200 for unloading Ramen boxes and an additional delivery fee of $1,000 is prepaid by a Ramen manufacturer.

A production cost at a manufacturer is $3/box and a manufacturer sells each box of Ramen to you at a price of $5. Both you and a manufacturer use an an nual holding cost of 20%.

1) What’s your order size and the cost for that? What’s a manufacturer’s cost?

2) I take over the Ramen factory. I want to save costs. What should I do?

3) Relative to (2), what’s my option to meet the optimal order quantity?

Answer rating: 100% (QA)

order Size 20000 Bones COST 240000x 5 20000 200000 t1o000 1200... View the full answer