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Good Kitchen sells a popular blender with the demand 175/month. Good Kitchen purchase the blenders from its supplier at the unit cost of $2.50 and the cost of placing an order has been estimated to be $12.00. Good Kitchen uses an inventory carrying charge of I = 27% per year.
Determine (a) the optimal order quantity, (b) the order frequency, and (c) the annual holding and setup cost. If, through automation of the purchasing process, the ordering cost can be cut to $4.00, what will be (d) the new economic order quantity, (e) the order frequency, and (f) annual holding and setup costs? Explain these results.
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Based on the readings for Week One, including the article by Mintzberg, discuss what kind of managerial work you expect the individual selected for this position to be doing, and which particular skills you would expect the successful candidate to..
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