Calculate total cost for the most economic order size

Assignment Help Operation Management

Reference no: EM13109767

Company A uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Company A uses 800 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $50 per order. The cost schedule of 2 suppliers are as follows: VENDOR 1 VENDOR 2 QUANTITY PRICE/LB QUANTITY PRICE/LB 1-499 $17.00 1-399 $17.10 500-999 16.75 400-799 19.85 1000 + 16.50 800-1,199 16.60 1200 + 16.25
a) What is the economic order quantity for each supplier?
b) What quantity should be ordered, and which supplier should be used?
c) what is the total cost for the most economic order size?
d) what factor(s) should be considered besides total cost?

Reference no: EM13109767

Questions Cloud

Calculate the cost of material : Company A finds profit at $15,000 inadequate for expanding business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment.

Confidence interval for mean amount of time ham is smoked : Length of smoking time was recorded for each. Mean was =140 hours. Suppose = 8 hours. Determine 95% confidence interval for mean amount of time grocery-store ham is smoked.

Explain an individual with sickle cell disease : What affect might you expect the precipitation of hemoglobin S and the subsequent cell sickling to have on oxygen delivery in an individual with sickle cell disease?

Hypothesis testing for kannon camera claims : Kannon Camera has developed a new camera that it claims can take an average of more than 10 photographs per second. You decide to evaluate the company's claim. In summary, in this problem you are given:

Calculate total cost for the most economic order size : Company A uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled.

What is the frequency of heterozygotes hh in the population : If the hernia allele in Belgium terriers has a frequency of 0.09, what is the probability that a puppy you buy will develop this problem (the problem is expressed by the homozygous recessive condition hh)?

Question related to inventory management : ABC distributors has an annual demand for an airport metal detector of 1,400 units. The cost of a typical detector to ABC is $400. Carrying cost is estimated to be 20% of the unit cost, and the ordering cost is $25 per order.

How many cells would make up the resulting colony : If a single E.coli cell is placed on a LB agar plate in the final stage of the quadrant streak method, how many cells would make up the resulting colony after 2 hours, and after 24 hours incubation at 37 C? explain how you get your results.

Determining hypothesis testing of mean-p-value method : Auntie Pam's Home Made Wild Grape Jelly has been a great hit through online sales. She has recently expanded her small factory and acquired a new filler machine to accommodate the increased demand, especially for the 12 ounce jar, which is the mos..

User Account

All Pages