Optimal order quantity and the minimum annual cost

Assignment Help Operation Management
Reference no: EM13778894

Bell computers purchases integrated chips at 350 per chip. The holding cost is $34 per unit per year. The ordering cost is $118 per order; sales are steady at 395 per month. The company supplier, rich blue chip manufacturing inc, decides to offer price concession in order to attract large orders. The price structure is shown below. Quantity purchased 1-99 units price per unit $350, quantity purchased 100-199 unit price per unit $325, and quantity 200 or more units price per unit $300.

a) What is the optimal order quantity and the minimum annual cost for Bell computers to order, purchase and hold these integrated chips? The optimal order quantity after the change in price structure is _________ units? The total annual cost for Bell computers to order, purchase and hold the integrated chips is $____________?

 

b) Bell computers wishes to use a 10% holding cost rather than the fixed $34 holding cost in part a. What is the optimal order quantity, and what is the optimal annual cost?

Reference no: EM13778894

Questions Cloud

What is the likely result and why : Jeffrey Swift has been a messenger used by a couple of the local businesses where the Discrimina, Inc. machine shop is located. If Jeffrey Swift sues for the waiting time hours, what is the likely result and why
Identify the social control mechanisms : This paper asks you to describe how a given behavior came to be considered deviant and to identify the social control mechanisms used to influence those who engage in the behavior.
Discuss the ethical challenges posed by decentralization : Discuss the ethical challenges posed by decentralization and community-oriented policing. Provide examples of any relationship between unethical behavior and COPPS
What are the historical and modern-day ethical issues : What are the historical and modern-day ethical issues in the law enforcement procession? How have these issues affected law enforcement personnel? Where does the Code of Ethics come into play and how is it viewed and applied
Optimal order quantity and the minimum annual cost : Bell computers purchases integrated chips at 350 per chip. The holding cost is $34 per unit per year. The ordering cost is $118 per order; sales are steady at 395 per month. The company supplier, rich blue chip manufacturing inc, decides to offer pri..
Adjustable assignments, compacting, and grouping issues : Discuss a concept that is important to you. Which graphic organizer would you use to teach this concept to your coworkers?
Which intellectual property appears the most difficult : Identify the IP rights that are owned by an organization you currently or formerly have worked at. Next, explain which intellectual property appears the most difficult for a business owner to protect
Stress-prone personalities and give examples : List the stress-prone personalities and give examples for each. List the stress-resistant personalities and give an example of each
Maximize the annual passenger-carrying capability : An airline is preparing to replace its old planes with three new styles of jets. The airline needs 17 new planes to service its current routes. The decision regarding which planes to purchase should balance cost with capability factors, including the..

Reviews

Write a Review

Operation Management Questions & Answers

  Risk management tools and techniques used in the project

How effective were the risk management tools and techniques used in the project and how effective were the policies and procedures used in the project?

  Comment on the factors which affect the process design

Select a process you perform daily but would like to spend less time doing, like driving to work. Design a flowchart using an appropriate tool. Comment on the factors which affect the process design.

  In this condition lionel must have an ability to in

lionel tucker has been asked to lead a virtual team on a project with a tight time schedule. while allocating the

  Infectious diseases are caused by pathogenic

1) Infectious diseases are caused by pathogenic microorganisms, such as bacteria, viruses, parasites or fungi; the diseases can be spread, directly or indirectly, from one person to another. Describe how Chicken pox and Measles different and ho..

  Best guess estimate of the dates for milestones

Develop a scope statement for this project that contains examples of all the elements. Assume that the event will occur in five weeks and provide your best guess estimate of the dates for milestones.

  Discussing the forces that are involved in formulation

Discussing the forces that are involved in formulation of the problem. Describe the organizational and environmental obstacles in a way that considers various key stakeholders that will be impacted by decisions.

  Why it is important to understand the impact of culture

Contrast the dynamics between dominant cultures and subcultures either in a work setting or in society. Explain why it is important to understand the impact of culture.

  Determine the order quantity and reorder point

Item Cost - $7.00 Order Cost - $283.00 Annual Hold - 32% of item cost Annual Demand - 22,100 Average Demand - 442 per week Standard deviation of weekly demand 20 per week lead time - 1.

  Complete a comprehensive strategic plan

Complete a comprehensive strategic plan Powerpoint presentation showing your complete strategic growth plan for your chosen organization.

  Under what conditions might a company prefer to negotiate

Under what conditions might a company prefer to negotiate rather than use competitive bidding to select a supplier. Explain the benefits of using a single supplier as opposed to multiple suppliers.  What are the risks.

  What techniques should be used for successful interviewing

What techniques should be used for successful interviewing and questioning. How important is setting to the interview. Why is preparation important and how does it affect the outcome of interviews

  Describe advantage of using digits to enter categorical data

What is the advantage of using digits to enter categorical data rather than using words or letters? What are the advantage and disadvantages of using optical scanners to score the results of a test?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd