Question

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price...

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8 per stone for quantities of 600 stones or more, $9 per stone for orders of 400 to 599 stones, and $10 per stone for lesser quantities. The jewelry firm operates 200 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.)


  Order quantity stones _______


b.

If annual carrying costs are 30 percent of unit cost, what is the optimal order size? (Round your intermediate calculations and final answer to the nearest whole number.)


  Optimal order size stones _______


c.

If lead time is six working days, at what point should the company reorder?


  Reorder quantity stones _______
Math   Statistics-And-Probability   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Trektronics store begins each month with 1,100 phasers in stock. This stock is depleted each...
The Trektronics store begins each month with 1,100 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $35 per year and the fixed order cost is $555. What is the total carrying cost? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Carrying costs $ What is the restocking cost? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,...
6. The Trektronics store begins each month with 900 phasers in stock. This stock is depleted...
6. The Trektronics store begins each month with 900 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $31 per year and the fixed order cost is $535. What is the total carrying cost? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Carrying costs $ What is the restocking cost? (Do not round intermediate calculations and round your answer to the nearest whole number,...
Garden Variety Flower Shop uses 550 clay pots a month. The pots are purchased at $3.00...
Garden Variety Flower Shop uses 550 clay pots a month. The pots are purchased at $3.00 each. Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs are $20 per order. The manager has been using an order size of 1,500 flower pots. a. Other than cost savings, what benefit would using the optimal order quantity yield (relative to the order size of 1,500)? (Use the rounded order quantity from Part a. Round your...
A large law firm uses an average of 50 boxes of copier paper a day. The...
A large law firm uses an average of 50 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $40 a year per box, and it costs approximately $70 to order and receive a shipment of paper. a. What order size would minimize the sum of annual ordering and carrying costs? b. Compute the total annual cost using your order size from part a c. Except for rounding, are...
Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes...
Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffler.   Annual demand 4,500 mufflers   Ordering cost $65 per order   Standard deviation of daily demand 6 mufflers per working day   Service probability 90 %   Item cost $35 per muffler   Lead time 3 working days   Annual holding cost 20 % of item value   Working days 300 per year Use the above information to...
A local service station is open 7 days per week, 365 days per year. Sales of...
A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 25 cans per day. Inventory holding costs are $0.90 per can per year. Ordering costs are $7 per order. Lead time is two weeks. Backorders are not practical—the motorist drives away. a. Based on these data, calculate the economic order quantity and reorder point. Hint: Assume demand is deterministic. (Round your answers to the nearest whole number.)   Economic order...
SHOW ALL STEPS, FORMULAS, AND EXPLANATIONS A large law firm uses an average of 40 boxes...
SHOW ALL STEPS, FORMULAS, AND EXPLANATIONS A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $60 to order and receive a shipment of paper. a. What order size would minimize the sum of annual ordering and carrying costs? b. Compute the total annual cost using your order size from part...
Retailers Warehouse (RW) is an independent supplier of household items to department stores. RW attempts to...
Retailers Warehouse (RW) is an independent supplier of household items to department stores. RW attempts to stock enough items for a 90 percent service probability. A stainless steel knife set is one item it stocks. Demand (1,800 sets per year) is relatively stable over the entire year. Whenever new stock is ordered, a buyer must assure that numbers are correct for stock on hand and then phone in a new order. The total cost involved to place an order is...
The Crandall store begins each week with 360 phasers in stock. This stock is depleted each...
The Crandall store begins each week with 360 phasers in stock. This stock is depleted each week and reordered. The carrying cost per phaser is $31 per year and the fixed order cost is $69. What is the current total carrying cost? (Omit $ sign in your response.) Carrying costs           $ What is the current restocking cost? (Omit $ sign in your response.) Restocking costs           $ What is the economic order quantity? (Round the answer to the nearest...
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day....
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 270 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 291 days a year. a. Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.)    Optimal...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT