Changes in parameter values

Assignment Help Business Economics

Reference no: EM137655

Q. The metropolitan book company assumed with certain that the ordering cost is $1200 per order as well as the inventory carrying cost is $0.08 per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Calculate the optimal order quantity if
both ordering costs as well as carrying cost are 10% lower than originally estimated. (b) both ordering cost as well as carrying cost are 10% higher than originally estimated, (c) ordering cost is 10% higher as well as carrying cost is 10% lower than originally estimated, (d) ordering cost is 10% lower as well as carrying cost is 10% higher than originally estimated. Determine the optimal order quantity as well as total inventory cost for each of the four cases. Prepare a table with values from all four cases as well as compare the sensitivity of the model solution to changes in parameter values.

Using Excel, Determine the following:
Hayes Electronics assumes with certainty that the ordering cost is $450 per order as well as the inventory carrying cost is $170 per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters as follows:

(a) both ordering cost as well as carrying cost is 10% lower than originally estimated.

(b) both ordering cost as well as carrying cost are 10% higher than originally estimated,

(c) ordering cost is 10% higher as well as carrying cost is 10% lower than originally estimated, (d) ordering cost is 10% lower as well as carrying cost is 10% higher than originally estimated. Determine the optimal order quantity as well as total inventory cost for each of the four cases. Prepare a table with values from all four cases as well as compare the sensitivity of the model solution to changes in parameter values.

Reference no: EM137655

Questions Cloud

Statistics questions : A sample of 160 workers in the downtown area classified each worker by race. A bar graph of the results is given below, but the bar for black workers in the graph below has been omitted.

Calculate the price and quantity : Calculate the price and quantity associated with the perfectly competitive outcome.

Accomplish this change in the money : If it wants to accomplish this change in the money supply using open-market operations, what should it do.

Currencies cause the trade deficit : Why might variations in the dollar's value in terms of other currencies cause the trade deficit to move independently from the changes in the government budget deficit.

Changes in parameter values : Prepare a table with values from all four cases as well as compare the sensitivity of the model solution to changes in parameter values.

Different opinions about the value of the dollar : Why does Caterpillar as well as your parents have different opinions about the value of the dollar.

Private sector has rational expectations : Assume that the central bank takes the drastic strategy in part 1, but that the private sector has rational expectations.

Each of the estimated coefficients statistically : Each of the estimated coefficients statistically significant at the 95 per cent confidence interval. What is the optimal output level.

Country experiences population growth : Assume that neither country experiences population growth nor technological progress as well as that 5 percent of capital depreciates each year

User Account

All Pages