What is the optimal delivery price to each customer

Assignment Help Operation Management
Reference no: EM13222460

TopOil, a refiner in Indiana, serves three customers near Nashville, Tennessee, and maintains consignment inventory (owned by TopOil) at each location. Currently, TopOil uses TL transportation to deliver separately to each customer. Each truck costs $800 plus $250 per stop. Thus delivering to each customer separately costs $1050 per truck. TopOil is considering aggregating deliveries to Nashville on a single truck. Demand at the large customer is 60 tons a year, demand at the medium customer is 24 tons per year, and demand at small customer is 8 tons per year. Product cost for Topoil is $10,000 per ton, and it uses a holding cost of 25 percent. Truck capacity is 12 tons.

a. What is the annual transportation and holding cost if TopOil ships a full truckload each time a customer is running out of stock? How many days of inventory is carried at each customer under this policy?

b. What is the optimal delivery policy to each customer if TopOil aggregates shipments to each of the three customers on every truck that goes to Nashville? What is the annual transportation and holding cost? How many days of inventory are carried at each customer under this policy?

c.what is the optimal delivery price to each customer if topoil aggregates each shipments to each of the three customers on every truck that goes to nashville? what is the total annual transportatioin and hlding cost? how many days of inventory are carried at each customer under this policy?

d. given the three different procurement policies above(a-c) what is the (aggregated) annual inventory turns for all 3 customers? you need to report only 1 number - as the overall measure for each strategy- to compare.

Reference no: EM13222460

Questions Cloud

What are some possible flows between e and lf : Consider a hypothetical labor force dynamics scenario for the month of November 2010. The stocks are the following: unemployed (U) = 5 million, employed (E) = 10 million, and Not-in-the- LF (~LF) = 3 million. From the beginning of November to the ..
Explain hexagonal closest-packed structure : An interstitial allow was prepared from two metals. Metal A with the larger atomic radius has a hexagonal closest-packed structure. What is the formula of the alloy if atoms of metal B occupy the following?
Which effect dominates other-substitution or income effect : In labor markets, a change in wages has both an income and a substitution effect. An increase in wages causes an increase in real income; at the same time, the relative price of leisure increases for the worker. Supposse that an increase in the wa..
What is the process specification : Studies on a bottle filling machine indicates it fill bottles to a mean of 16 ounces with a standard deviation of 0.10 ounces. What is the process specification, assuming the Cp index of 1?
What is the optimal delivery price to each customer : what is the optimal delivery price to each customer if topoil aggregates each shipments to each of the three customers on every truck that goes to nashville? what is the total annual transportatioin and hlding cost? how many days of inventory are ..
Determine the vapor pressure of pure water : The vapor pressure of water above this solution is found to be 0.3630 atm at 348.0 K . The vapor pressure of pure water at this temperature is 0.3804 atm.
Which schedule finishes sooner : The table below highlights the time taken in hours for (1) cutting and sewing and (2) delivery of each of the suits. Which schedule finishes sooner: First-come, first-served (123) or a schedule using Johnson's rule?
Compute the expected value of the random variable : Based on long years of experience, an instructor in the principles of economics has determined that in her class the probability distribution of X, the number of students absent on Mondays, is as follows: X: 0 1 2 3 4 5 6 7F(x)0.005 0.025 0.310 0.3..
Define what is the molar mass of the enzyme : What is the molar mass of the enzyme if the osmotic pressure of the solution at 298K is 0.138 ATM? Note that enzymes are non-electrolytes.

Reviews

Write a Review

 

Operation Management Questions & Answers

  Determine the total charge under each plan

determine the total charge under each plan for this case: 120 minutes of days calls and 40 minutes of evening calls in a week -prepare a graph that shows total weekly cost for each plan versus daytime call minutes

  Illustrate what volume is necessary in order for riverview

With the better quality shirt also $25 selling price, illustrate what volume is necessary in order for Riverview to earn a $7,000 profit on the shirt product line.

  What would point some possible conflicts among the key

what would point some possible conflicts among the key stakeholders interests and what steps would you recommend that he takes to best deal with them?

  The sampling distribution can be assumed to be approximately

The sampling distribution can be assumed to be approximately normal even when the underlying process distribution is not normally distributed.

  Solve the above problem utilizing the excel solver

The daily demand for solution A lies between 30 and150 units also for solution B between 40 and 200 units. Find out the optimal production amounts of A also B utilizing the Graphical Method. Solve the above problem utilizing the Excel Solver.

  How does a cmo view competitors

How does a CMO view Competitors? How should CMOs deal with stronger competitors? How should CMOs deal with weaker competitors?

  Explain managerial styles to manage an emloyee

What are some managerial styles you would employ in managing an emloyee who is considered baby boomer.

  International management- managing in dynamic global

International Management- managing in dynamic global enviroment, How can CIENA protect its intellectual property in each country

  Describe a conflict within an organization or team

Describe a conflict within an organization or team with which you are familiar. Identify and describe the source(s) and level of the conflict and support with evidence.

  Illustrate what other factors are relevant to this issue

Illustrate what other factors are relevant to this issue. Explain how do the changes in assumptions mentioned by the other managers affect the proposal. Illustrate what position should Jim take.

  What are the support also resources required from senior

As none your team B2B outside sales experience, will six months be enough time to train some or all of your employees on B2B outside sales techniques, or will going to the external market place be the best solution.

  Is a large discrepancy between executive pay

American Capitalism. Is a large discrepancy between executive pay and that of the average worker unfair to the worker? Is it unfair to increase a CEO's compensation at the same time that he or she downsizes

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