How else could the manager justify using an order size

Reference no: EM13185918

A food processor uses approximately 29,480 glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost is 18 cents per jar, and reordering cost is $60 per order. The company operates an average of 20 days a month.

a.
What penalty is the company incurring by its present order size? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Penalty $

b.
The manager would prefer ordering 8 times each month but would have to justify any change in order size. One possibility is to simplify order processing to reduce the ordering cost. What ordering cost would enable the manager to justify ordering every other day? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Cost $

c.
Suppose that after investigating ordering cost, the manager is able to reduce it to $50. How else could the manager justify using an order size that would be consistent with ordering every other day? (Round your intermediate calculations to 2 decimal places and final answer to 4 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Reference no: EM13185918

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