Compute the holding cost for the different jams

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Reference no: EM133673637

Three Jay's Case (Three Jay's corporation).

1. Compute the setup cost that is currently used by Three Jays. Show the computation details. (Hint: Consider the admin cost, production preparation cost, size changeover cost, and cleaning cost. Ensure that you compute the cost in $ per setup.)

2. Compute the holding cost for the different jams in $ / unit / per year.

3. Update the EOQ quantities for all the types of Jams based on 2012 demand data. What is the percentage change in EOQ values from the existing ones which are based on the 2010 demand? (Use yearly demand data for the computations in Exhibit 5).

4. Recompute the setup cost and the holding costs based on only idle time of hourly line workers only (for setup) and the opportunity cost of investing in marketing, and other expenses only (for holding cost; do not account for cost of capital)?

5. Recompute the EOQ quantities based on the revised setup and holding cost. What is the percentage change from current values?

6. What should Three Jays do in terms of reducing the cost of inventory? (Give a response based on your best judgment).

Reference no: EM133673637

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