Find the order quantity that will minimize total annual cost

Assignment Help Operation Management

Reference no: EM132252304

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.10 per stone for quantities of 600 stones or more, $8.50 per stone for orders of 400 to 599 stones, and $9.00 per stone for lesser quantities. The jewelry firm operates 110 days per year. Usage rate is 28 stones per day, and ordering costs are $48.

a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Order quantity stones

b. If annual carrying costs are 30 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Optimal order size stones

c. If lead time is 3 working days, at what point should the company reorder? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Reorder quantity stones

Reference no: EM132252304

Questions Cloud

Leadership behaviors-traits-skills-situational : So far in this course, we have been exposed to leadership behaviors, traits, skills, situational and contingency concepts.

What ROP would be consistent with desired service level : If an ROP model is used, what ROP would be consistent with the desired service level? How many days of supply are on hand at the ROP, assuming average demand?

Contract for improvements be liable for cost under such lien : What is the purpose of a mechanic’s lien? Should property owners who do not contract for improvements be liable for the cost under such a lien?

Market segmentation important to strategy implementation : Why is market segmentation important to strategy implementation?

Find the order quantity that will minimize total annual cost : If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost.

International outsourced completion of programming tasks : Discuss how the project manager should address cost/time trade-offs associated with international outsourced completion of programming tasks.

Ideas for bringing about less polarized country : Think of various changes that could be made to our constitution, laws, tax policies, regulations, media, etc.

Right of employees to bargain with their employers : Have unions outlived their usefulness in the US economy, should be shut down as a right of employees to bargain with their employers?

Defined as the creation of time and place utility : Transportation has been defined as the “creation of time and place utility.”

User Account

All Pages