Reference no: EM132111707

1. A company’s competitive strategy

a. defines the set of customer needs that it seeks to satisfy through its products and services.

b. specifies the portfolio of new products that it will try to develop.

c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted.

d. determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product.

e. determines how it will obtain and maintain the appropriate set of skills and abilities to meet customer needs

2. Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps is organic palm oil. She needs 1000 kgs of palm oil per day on average. The supplier charges a $52 delivery fee per order (which is independent of the order size) and $5 per kg. Sarah’s annual holding cost is 20%. Assume she operates and sells 5 days per week, 52 weeks per year.

a. If Sarah wants to minimize her annual ordering and inventory holding costs, how much palm oil should she purchase with each order (in kgs)? kgs (Round to nearest integer.)

b. If Sarah orders 4250 kgs with each order, what would be the annual sum of ordering and holding costs? (Round your answer to 3 decimal places.)

c. If Sarah orders 7700 kgs with each order, what would be sum of ordering and holding costs per kg sold? per kg

d. Sarah’s supplier is willing to sell her palm oil at a 5% discount if she purchases 15,000 kgs at a time. If she were to purchase 15,000 kgs per order what would be her annual sum of ordering and holding costs?