Question

**Problem 10-21 (Algorithmic)**

Apply the EOQ model to the following quantity discount situation
in which *D* = 450 units per year, *C*_{o} =
$42, and the annual holding cost rate is 30%.

DiscountCategory |
Order Size |
Discount(%) |
Unit Cost |

1 | 0 to 99 | 0 | $11.00 |

2 | 100 or more | 2 | $10.78 |

What order quantity do you recommend? If required, round your answer to the nearest whole number.

Answer #1

Apply the EOQ model to the following quantity discount situation
in which D = 450 units per year, Co =
$42, and the annual holding cost rate is 20%.
Discount
Category
Order Size
Discount
(%)
Unit Cost
1
0 to 99
0
$12.00
2
100 or more
3
$11.64
What order quantity do you recommend? If required, round your
answer to the nearest whole number.
____

Apply the EOQ model to the following quantity discount situation
in which D = 530 units per year, Co =
$43, and the annual holding cost rate is 30%.
Discount Category
Order Size
Discount (%)
Unit Cost
1
0 to 99
0
12
2
100 or more
4
11.52
What order quantity do you recommend? If required, round your
answer to two decimal places

Consider the all-units quantity discount schedule below.
Price Bracket
Quantity Ordered
Price Per Unit
EOQ at that Price
1
1-1999
$100
3,454
2
2000-3999
$90
3,647
3
4000-5999
$80
3,860
4
6000-7999
$70
4,067
5
8000+
$60
4,510
If you want to take advantage of the price discount in Price
Bracket 2, given the required order quantity and calculated EOQ at
that price, what is the Total Annual Cost (holding, setup, and
purchasing) following the optimal order quantity in that...

Assume that the following quantity discount schedule is
appropriate. If annual demand is 120 units, order costs are $20 per
order, and the annual holding cost is 25% of price, what order
quantity would you recommend?
Order
Size
Unit Cost
0 to
49
$30.00
50 to
99
$28.00
100 or
more
$26.00

Suppose a grocery store buys milk (in gallon jugs) using the EOQ
model with quantity discounts.
Holding cost is $0.10 per gallon per day
Order placement cost is $20, regardless of size
Weekly demand is 350 gallons
The milk supplier offers two discount levels for order quantity
Q:
$0.05 per gallon when 100 gal. ? Q < 200 gal.
$0.045 per gallon when Q ? 200 gal.
What order quantities need to be checked?
What is the economic order quantity?

2. The assumptions of the production order quantity model are
met in a situation where annual demand is 3650 units, setup cost is
$50, holding cost is $12 per unit per year, the daily demand rate
is 10 and the daily production rate is 100. What is the number of
production runs for this problem?
A) 16.54 B) 32.24 C) 17.42 D) 19.83 E) 20.96

Problem 16-05
(Algorithmic)
To generate leads for
new business, Gustin Investment Services offers free financial
planning seminars at major hotels in Southwest Florida. Gustin
conducts seminars for groups of 25 individuals. Each seminar costs
Gustin $3600, and the average first-year commission for each new
account opened is $5500. Gustin estimates that for each individual
attending the seminar, there is a 0.01 probability that he/she will
open a new account.
Determine the equation for computing Gustin’s profit per
seminar, given values...

Please answer the following Case
analysis questions
1-How is New Balance performing compared to its primary rivals?
How will the acquisition of Reebok by Adidas impact the structure
of the athletic shoe industry? Is this likely to be favorable or
unfavorable for New Balance?
2- What issues does New Balance management need to address?
3-What recommendations would you make to New Balance Management?
What does New Balance need to do to continue to be successful?
Should management continue to invest...

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