Select the lowest total annual cost strategy

Assignment Help Operation Management
Reference no: EM13742045

A grocery store orders paper grocery bags from a distributor. The store uses 2,300 cases of bags per year, and its ordering cost is $65 per order. The store's carrying cost rate is 35% of the price per case of bags. The distributor has the following pricing structure for cases of bags:

Order Quantity (Number of cases) Price per case
1-49 $129.45
50-249 $127.95
250-999 $126.45
1000 and over $125.95

a) How many cases of bags should the store order each time if we want to select the lowest total annual cost strategy (ordering cost plus holding cost plus material acquisition cost)?
b) What is the resulting total cost per year (ordering cost plus holding cost plus material acquisition cost) for this strategy and the next lowest cost strategy?
c) If the store has only enough storage space for 100 cases of bags, how many should it order each time? Why?

If a calculated order quantity is a fraction of a case, leave it as a fractional amount. 

Reference no: EM13742045

Entirely different organization-still be outstanding leader

Could an outstanding leader in one organization move into an entirely different organization and still be an outstanding leader? For example, could a great football coach with

Pros and cons of using off-balance-sheet financing

As a CFO of a publically traded company, evaluate the pros and cons of using off-balance-sheet financing, including a recommendation as to whether or not you support using the

Which player has a winning strategy-describe the strategy

A box contains 300 matches. Two players take turns removing no more than half the matches from the box. Whoever cannot make a move loses. Which player has a winning strategy?

Number of levels between upper management and labor

Let's talk about the number of levels between upper management and labor. In your experience, how do a flat organization (one with only a few levels of difference between uppe

How tools such as master scheduling-MRP and DRP

Explain in your own words how tools such as master scheduling, MRP, and DRP can be used to coordinate activity up and down a supply chain. For example, what information might

What is its effective capacity

In a job shop, effective capacity is only 48 percent of design capacity, and actual output is 58 percent of effective output. What design capacity would be needed to achieve a

Manufacturing cycle efficiency

With the following information, compute the throughput time and the manufacturing cycle efficiency: Wait time 12.0 days Inspection time 0.9 days Processing time 3.5 days Move

Understanding of important role that operations function

This module is designed to develop a detailed awareness and understanding of the important role that the Operations function plays in the creation and distribution of produc

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd