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The demand for spring water at the SLC Wal-Mart is 500 liters per week. The setup cost for placing an order to replenish inventory is $20. The order is delivered by the supplier which charges Wal-Mart $0.10/liter for the cost of transportation from the Rocky Mountains to SLC. This transportation cost increases the cost of water to $1.25/liter. The water loses its freshness while stored at the SLC Wal-Mart. To account for this, the Wal-Mart charges an annual holding cost of $2.5/liter. Assume that there are 52 weeks a year.
Determine Wal-Mart’s Economic Order Quantity (in liters)? How often should Wal-Mart order for water (in weeks) when Wal-Mart orders its economic order quantity computed in Q11 each time it places an order?
The Cowboy Saddle Company manufactures plastic saddles that are used in the assembly process of their Mr. Ed doll. If the run time for producing a batch of saddles is 4 days
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