What policy would gold have to use in that case

Assignment Help Management Theories

Reference no: EM131463318

Question: David's Delicatessen flies in Hebrew National salamis regularly to satisfy a growing demand for the salamis in Silicon Valley. The owner, David Gold, estimates that the demand for the salamis is pretty steady at 175 per month. The salamis cost Gold $1.85 each. The fixed cost of calling his brother in New York and having the salamis flown in is $200. It takes three weeks to receive an order. Gold's accountant, Irving Wu, recommends an annual cost of capital of 22 percent, a cost of shelf space of 3 percent of the value of the item, and a cost of 2 percent of the value for taxes and insurance.

a. How many salamis should Gold have flown in and how often should he order them?

b. How many salamis should Gold have on hand when he phones his brother to send another shipment?

c. Suppose that the salamis sell for $3 each. Are these salamis a profitable item for Gold? If so, what annual profit can he expect to realize from this item? (Assume that he operates the system optimally.)

d. If the salamis have a shelf life of only 4 weeks, what is the trouble with the policy that you derived in part (a)? What policy would Gold have to use in that case? Is the item still profitable?

Reference no: EM131463318

Questions Cloud

Determine the optimal order quantity for colombian coffee : Consider the coffeehouse discussed in given Problem. Suppose that its setup cost for ordering was really only $15. Determine the error made in calculating.

How the shared theme of uncertain vision is treated : Explain how this shared theme of "uncertain vision" is treated somewhat differently in Othello than it is in Oedipus the King.

Find the optimal time between placement of orders of items : A local machine shop buys hex nuts and molly screws from the same supplier. The hex nuts cost 15 cents each and the molly screws cost 38 cents each.

Watch the movie - the great gatsby : Write an essay in which you compare Art Spiegelman's Maus to a more traditionally formatted story assigned for this class.

What policy would gold have to use in that case : avid's Delicatessen flies in Hebrew National salamis regularly to satisfy a growing demand for the salamis in Silicon Valley. The owner, David Gold, estimates.

Calculate the dimension of the channel width : Calculate the dimension of the channel width W for the drivers and respective dimensions of W and L for C and RL. To assist you with the calculation, you can select appropriate value for the output voltage.

How would you capitalize the letters in a references list : Imagine that you have located an article by two authors, Smith and Jones. You would like to integrate this article into your paper.

What is the average annual cost of holding : The Wod Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate of 10,000 pounds per day.

Discuss about topic - positive accounting theory : ACCT 304 Accounting Theory Assignment. "Explain the difference between (PAT) and normative accounting theory (NAT)

User Account

All Pages