Wifi outsources manufacture of these routers

Assignment Help Management Theories

Reference no: EM131054015

2. WiFi Labs sells wireless routers that are very popular in the market with a weekly demand that is normally distributed with a mean of 20,000 and a standard deviation of 6,000. WiFi outsources manufacture of these routers to a local contract manufacturer who charges $50 per router.

Each time, WiFi places an order, they incur an order placement and transportation cost of $2,000 ($100 for order placement and $1,900 for transportation). WiFi has an annual holding cost of capital at 20 percent. The lead time for replenishment at the local supplier is 1 week. Assume 50 weeks in a year.

i. What is the optimal order size that WiFi should order from its contract manufacturer each time they place their order?

ii. What should the reorder point be if WiFi wants to provide a service level of 95 percent? Explain its relationship to the quantity you found in i.

iii. An overseas supplier has been identified who can supply routers for $49 each. The overseas shipping will raise the cost of each order to $50,000 and the lead time of supply to 4 weeks. Should WiFi use the overseas supplier? Explain showing all your work.

Reference no: EM131054015

Questions Cloud

What would be the decomposition of this relation : What would be the decomposition of this relation based on the above MVD? Evaluate each resulting relation for the highest normal form it possesses.

Advantage of a loophole in the market rules : Ethical Issue: they took advantage of a loophole in the market rules governing energy trading in California.

Summarize the article making a mockery of the american dream : Summarize the key points of the articles "Making a Mockery of the American Dream", " Why More Education Won't Fix Economic Inequality", Competition Policy. Crossing continents and " Inequality. On important but irrelevant facts".

Alliance in the global smartphone industry : The Nokia-Microsoft strategic alliance was announced in early 2011 to cooperate in the development of smart-phones. The Wall Street Journal wrote:"Nokia calls Microsoft for help."1 The Financial Times observed: "Elop jumps into the arms of former bos..

Wifi outsources manufacture of these routers : 2. WiFi Labs sells wireless routers that are very popular in the market with a weekly demand that is normally distributed with a mean of 20,000 and a standard deviation of 6,000. WiFi outsources manufacture of these routers to a local contract man..

Computing the roots of the equation : x2 + 2x + 3 =8 is the given equation then find the value of a+b -ab where a and b are roots of the equation.

Respect to multiplication : Let G be the group {10n : n∈Z} with respect to multiplication. Prove that G is isomorphic to Z. (The operation of Z is addition)

What does the resulting relation schema look like : what does the resulting relation schema look like

Determining the maximize profit : Determine how many items you need to sell to maximize profit (note that Profit = Revenue - Cost and Revenue = Quantity times the price per item.

User Account

All Pages