Optimal order quanity-rop

Reference no: EM1393932

A company distributes a printed guide for the approximate 22,000 visitors it has each year. Holding costs for the brochures are 10% of purchase cost - and it costs $30 to place an order with the printer (unless you order the largest discount category in which case the order cost drops to $25). . The printer has a discounted pricing structure for larger orders you purchase in bulk (as per the schedule below). The company is open 275 days per year and it takes 21 days to obtain an order once it's been placed.

Category Order Size Unit Cost

1 0 - 999 $4.50

2 1000 - 2499 $4.20

3 2500 - 4999 $3.30

4 5000 $3.00

a. You have determined that the calculated economic order quantities for categories 3 and 4 are NOT feasible. How many brochures should be printed at a time? I calculated first the Economic Order Quantity but I am not sure how to do next. EOQ= SQUARE ROOT OF 2DS/H

b What is the total expected annual inventory cost at the optimal order quantity?

c. What is the re-order point?

Reference no: EM1393932

Questions Cloud

How does meredith use its variety of products : Which of the following strategies do you think best supports Meredith's effort also support your answer? (Undifferentiated, Differentiated, Concentrated, Micromarketing)

Case study-executive camera company : The Executive Camera Company provides full expenses for its sales force. When attempting to budget automobile expenses for its employees, the financial department uses mileage figures to estimate gas, tire, and repair expenses.

Calculate the amount dennis may deduct as travel expenses : Calculate the amount Dennis may deduct as travel expenses for the trip. Dennis, the owner of Dennis Company, incurs the following expenses while away from home on a three-week business trip during the current tax year

Illustrate what steps you could take to address : Examine the way you perceive your co-workers or classmates also the perceptual or attribute, ion errors you are likely to make also discuss illustrate what steps you could take to address those errors. Provide specific e.g. to support your respons..

Optimal order quanity-rop : What is the total expected annual inventory cost at the optimal order quantity? What is the re-order point?

Calculate the observed frequency of cftr alleles : Cystic fibrosis is a chronic lung and digestive disease caused by a mutation in the CFTR gene on chromosome 7. In the United States approximately 39 in 10,000 individuals are affected.

Explain why the escalation is non-rational : You also your co-workers had an in-depth discussion about non rational escalation of commitment. Use your best communication techniques to discuss the following questions: Classify the possible original decisions, the person(s) who could make it a..

Population mean height using the confidence interval : Construct a 99% confidence interval on the population mean height of all 1-year-old pine seedlings. What are the confidence limits? What statement can be made about the population mean height using the confidence interval?

Determine optimal order quantity : Find the optimal order quantity and what is the optimal total ordering cost per year vs. what is that cost with the current policy?

User Account

All Pages