What is the optimal lot size for the retailer

Assignment Help Other Subject

Reference no: EM131861422

Question: Crunchy, a cereal manufacturer, has dedicated a plant for one major retail chain. Sales at the retail chain average about 240,000 boxes/year and production at the plant keeps pace with this average demand. Each box of cereal costs Crunchy $3 and is sold to the retailer at a wholesale price of $5. Both Crunchy and the retailer use a holding cost of 20%. For each order placed, the retailer incurs an ordering cost of $200. Crunchy incurs the cost of transportation and loading that totals $1,000 per order shipped. What is the optimal lot size for the retailer? What is the lot size that minimizes the inventory costs (ordering, delivery, holding) across both Crunchy and the retailer? Design an all unit quantity discount that encourages the retailer to order 18,974 units/month.

Reference no: EM131861422

Questions Cloud

Create a slogan for the business : Create a slogan for the business, less than 20 words, which captures the essence of the brand. Explain your rationale for the slogan.

Define the bond-treasury-note-par value and coupon rate : Define each of the following, bond, treasury, note, risk free rate of return, par value, coupon rate, coupon payment, period coupon payment,

Explain the different customer segments : Explain the different customer segments that can be identified and illustrate the CRM strategies that could be used for each identified segment.

Require on their investment in the firm represent to firm : What does the return that shareholders require on their investment in the firm represent to the firm?

What is the optimal lot size for the retailer : Crunchy, a cereal manufacturer, has dedicated a plant for one major retail chain. Sales at the retail chain average about 240,000 boxes/year and production.

Cash flows are reinvested at yield to maturity : Consider a 5-year bond paying 8 percent coupon. Find the realized yield if cash flows are reinvested at the yield to maturity.

What are the critical social and cultural practices : What are the critical social and cultural practices that impact business relation in UAE? Describe strategic HR issues in global assignment.

Determine how good is the evidence : Are silicone breast implants dangerous? It looks as if women who have had such surgeries can again feel safe. In a recent interview, Dr. Walter Newbody.

Why is walmart impacted by foreign exchange fluctuations : Why is Walmart impacted by Foreign Exchange Fluctuations? And what are some of the potential benefits or harms of these changes?

User Account

All Pages