Question

M7_IND3. Floral Beauty, Inc., is a large floral arrangements store located in Asheville Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $19 each. There is an annual demand for 22,000 Bridal Lilies. The manager of Floral Beauty has determined that the ordering cost is $85 per order, and the carrying cost, as a percentage of the unit cost, is 14%. Floral Beauty is now considering a new supplier of Bridal Lilies. Each lily would cost only $17.50, but to get this discount, Floral Beauty would have to buy shipments of 2,000 Bridal Lilies at a time. Should Floral Beauty use the new supplier and take this discount for quantity buying? a) What is the EOQ for the current supplier? b) What is the annual ordering cost for the current supplier? c) What is the holding cost per unit per year for the current supplier? d) What is the total annual inventory cost (including purchase cost) for the current supplier? e) What is the annual holding cost for the new supplier (when purchasing 2,000 each order)? f) What is the total annual inventory cost (including purchase cost) for the new supplier (when purchasing 2,000 each order)? g) What should Floral Beauty do? (Multiple Choice question)

Answer #1

**Answer:**

Bruno Fruscalzo decided to start a small production facility in
Sydney to sell gelato to the local restaurants. His local milk
supplier charges $0.50 per kg of milk plus a $21 delivery fee (the
$21 fee is independent of the amount ordered). Bruno’s holding cost
is $0.03 per kg per month. He needs 9000 kg of milk per month.
Round your answer to 3 digits after the decimal point.
Do NOT use comma in your numeric answers.
Suppose Bruno orders...

Please complete all work in excel. Use excel to make the
calculations (cells can be clicked on to view any formulas used)
and be sure to identify your answer, including units.
A manager needs to buy raw materials for the production process.
For a particular raw material, the manager uses 20,000 units each
year. The supplier has quoted a price of $6.50 per unit for an
order size of 999 units or less, a price of $6 per unit for...

Bruno Fruscalzo decided to start a small production facility in
Sydney to sell gelato to the local restaurants. His local milk
supplier charges $0.50 per kg of milk plus a $21 delivery fee (the
$21 fee is independent of the amount ordered). Bruno’s holding cost
is $0.03 per kg per month. He needs 9000 kg of milk per month.
Round your answer to 3 digits after the decimal point.
Do NOT use comma in your numeric answers.
If Bruno’s storage...

The soft goods department of a large department store sells 175
units per month of a certain large bath towel. The unit cost of a
towel to the store is $2.50 and the cost of placing an order has
been estimated to be $12.00. The store uses an inventory carrying
charge of I = 27% per year. Determine:
If, through automation of the purchasing process, the ordering cost
can be cut to $4.00, what will be
(3 points) (d) the...

PLEASE SHOW ALL WORK IN EXCEL!!!!!!!
SHOW CALCULATIONS / FORMULAS IN
ANSWER!!!!!!!!
You need to buy raw materials for your production process. You
use 2,000 units of the raw material each year. The supplier quotes
you a price of $9.50 per unit for an order size of 499 units or
less, a price of $9 per unit for orders of 500 to 1499 units, and a
price of $8.50 per unit for an order of 1,500 or more units. You...

Thomas Kratzer is the purchasing manager for the headquarters of
a large insurance company chain with a central inventory operation.
Thomas's fastest-moving inventory item has a demand of 5,950 units
per year. The cost of each unit is $104, and the inventory carrying
cost is $11 per unit per year. The average ordering cost is $29 per
order. It takes about 5 days for an order to arrive, and the demand
for 1 week is 119 units. (This is a...

Sarah’s Organic Soap Company makes organic liquid soap. One of
the raw materials for her soaps is organic palm oil. She needs 500
kgs of palm oil per day on average. The supplier charges a $55
delivery fee per order (which is independent of the order size) and
$5.5 per kg. Sarah’s annual holding cost is 15%. Assume she
operates and sells 5 days per week, 52 weeks per year.
a.If Sarah wants to minimize her annual ordering and inventory...

QUESTION 3
HIT Co demands 120,000 units of cogs a year. Every month, the
company pays £200 to place an order with its supplier. Each cog
costs £7.50 and the annual holding cost is £1.00 per unit. The
company maintains a buffer stock of cogs, which is sufficient to
meet demand for 10 working days.
Required:
a) What is the annual cost of inventory for HIT under the
current ordering policy?
b) Ignoring the bulk discount, what is the optimal...

Ross White’s machine shop uses 2,500 brackets during the course
of a year, and this usage is relatively constant throughout the
year. These brackets are purchased from a supplier 100 miles away
for $15 each, and the lead time is 2 days. The holding cost per
bracket per year is $1.50 (or 10% of the unit cost) and the
ordering cost per order is $18.75. There are 250 working days per
year.
(a) What is the EOQ?
(b) Given the...

Bruno Fruscalzo decided to start a small production facility in
Sydney to sell gelato to the local restaurants. His local milk
supplier charges $0.5 per kg of milk plus a $25 delivery fee (that
is independent of the amount ordered). Bruno’s holding cost is
$0.02 per kg per month. He needs 9750 kgs of milk per month.
a.Suppose Bruno orders 9250 kgs each time. What is his average
inventory (kgs)?
b.Suppose Bruno orders 7000 kgs each time. How many orders...

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