A mail-order house uses 15,750 boxes a year. Carrying costs are 60 cents per box a year and ordering costs are $96. The following price schedule applies.

A mail-order house uses 15,750 boxes a year. Carrying costs are 60 cents per box a year and ordering costs are $96. The following price schedule applies.

Number of Boxes Price per Box
1,000 to 1,999 $1.25
2.000 to 4,999 1.20
5,000 to 9,999 1.15
10.000 or more 1.10

a. Determine the optimal order quantity (Round your answer to the nearest whole number)

Don't use plagiarized sources. Get Your Custom Essay on
A mail-order house uses 15,750 boxes a year. Carrying costs are 60 cents per box a year and ordering costs are $96. The following price schedule applies.
Just from $8 /Page 0r 300 words
Order Now

Optimal order quantity  = _______  boxes

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

b. Determine the number of orders per year. (Round your answer to 2 decimal places.)

Number of order _______  per year

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.50 per stone for orders of 400 to 599 stones, and $10 per stone for lesser quantities. The jewelry firm operates 184 days per year. Usage rate is 25 stones per day, and ordering costs are $48.

a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Round your intermediate calculations and final answer to the nearest whole number.)

b. If annual carrying costs are 27 percent of unit cost, what is the optimal order size? Round your intermediate calculations and final answer to the nearest whole number.)

c. If lead time is 7 working days, at what point should the company reorder?

 

In: Other

Looking for a similar assignment? Get help from our qualified experts!

Order Now