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The Cover-up Drapery Company carries four types of fabric with the following characteristics: Assume that the items are to be

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The Cover-up Drapery Company carries four types of fabric with the following characteristics:
The Cover-up Drapery Company carries four types of fabric with

Assume that the items are to be ordered together from the same supplier at an ordering cost of $20 per order and an annual carrying cost of 20 percent. Also assume 300 working days in a year.
a. If a P system is used, what is the optimal ordering interval in days?
b. How much of each type of carpet would be ordered when a combined order is placed?
c. What is the effect on the ordering interval of changing the carrying cost to 25, 30, and 35 percent?
d. Why can't these carpets be ordered by using a Q system?
e. Classify the four items above as A, B, or C inventory items.

Transcribed Image Text:

Type Annual Demand (yards) tem Cost per Yard 300 250 100 200 $20 $18 $12 $ 8

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a The optimal ordering interval is 36 8 days b The amount of each type of carpet ordered in the comb…View the full answer


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Operations Management in the Supply Chain Decisions and Cases

Operations Management in the Supply Chain Decisions and Cases

ISBN: 978-0073525242

6th edition

Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein

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Question Posted: September 20, 2015 09:49:31
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