Annual cost of the silverware with optimal order quantity

Assignment Help Operation Management

Reference no: EM132241259

The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer.

>For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece.

>If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece.

>5,001 to 10,000 pieces brings the price to $1.40/piece, and

>10,001 and above reduces the price to $1.25/piece.

Lisa's order costs of $195 per order, her annual holding costs are 5%, and the annual demand is 43,800 pieces. For the best option, (the best option is the price leve that results in an EOQ within the acceptable range).

A) What is the optimum ordering quantity?

B) What is the annual holding cost?

C) What is the annual ordering cost?

D) What are the annual cost of the silverware with an optimal order quantity?

E) What is the total annual cost, including ordering, holding, and purchasing the silverware?

Reference no: EM132241259

Questions Cloud

Company without unionized workforce : Tex Olafson worked for five years as a messenger for Pressure Sell Advertising Agency, a company without a unionized workforce.

Estimating current medical claim liabilities : Estimating current medical claim liabilities and future medical expenses are the most important task of actuaries.

The claim submission process is very complex : The claim submission process is very complex. Give an overview of the process and explain the importance of each step.

Estimating current medical claim liabilities : Estimating current medical claim liabilities and future medical expenses are the most important task of actuaries.

Annual cost of the silverware with optimal order quantity : What are the annual cost of the silverware with an optimal order quantity? What is the optimum ordering quantity?

Marketing and sales departments provide the same function : Marketing and sales departments provide the same function in a MCO. All MCOs have a Board of Directors.

Conflict is inevitable : Conflict is inevitable. Conflicts is a growing concern among staff and administrators because of its negative impact on all involved.

Think about the system of technology : How you should think about the SYSTEM of technology. how is it created, maintained, implemented? are there issues of power?

Identify two prejudices or stereotypes : Identify two prejudices or stereotypes that are common in the African American culture. Explain why these stereotypes exist. Support your claims with references

User Account

All Pages