You work at DeliWine, a US wine retailer. DeliWine sources one of their best selling wines, JeanRose, from a Dutch wine distributor. The cost of placing an order is $ 513 and the annual holding cost rate of DeliWine is 14 %. The lead time is 2 weeks and DeliWine only takes ownership of the goods when the shipment arrives at their distribution center in Delaware.

Assume that there are 48 weeks in a year.

The annual demand for JeanRose is very stable at 34954 bottles. The costs of JeanRose is $ 78 per bottle.

What is the optimal order quantity of JeanRose (in bottles)?

Round your answer up to the nearest integer.

 

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Using the order quantity from Part 1.1 (rounded value), how many weeks are there between each optimal order quantity of JeanRose?

Writee your ans with two decimal numbers.

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Part 2

 

Based on the exceptionally stable demand for JeanRose, you are assuming that demand is deterministic in your model. What are the estimated annual costs of DeliWine for this policy? If needed, use the rounded values from Part 1.

Annual pipeline inventory cost. Keep in mind that DeliWine only takes ownership of the goods when the shipment arrives at their distribution center.

Round your answer to the nearest integer.

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Annual purchasing cost

Round your answer to the nearest integer.

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Annual ordering cost

Round your answer to the nearest integer.

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Annual average cycle stock cost

Round your answer to the nearest integer.

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Part 3

 

JeanRose is packed in a special bottle that requires very careful handling. For large deliveries, some extra employees are needed at the distribution center in Delaware to help unpack. You pointed to your manager that there is an extra handling cost of $0.34 for each bottle of JeanRose if the order for JeanRose is larger than 409 bottles. (You can consider that each bottle costs $0.34 more if the order for JeanRose is larger than 409.)

What is the order size that will minimize total costs considering the extra handling costs?

Round your answer to the nearest integer.

  Answer :

Answer rating: 100% (QA)

To determine the optimal order quantity of JeanRose we can use the Economic Order Quantity EOQ formula The EOQ formula is given by EOQ sqrt2 D S H whe... View the full answer