Compute the optimal order quantity at the plan

Reference no: EM131408677

Stage Two Incorporated produces a popular item at its Paducah, KY plant and ships this item to its national distribution center (DC) in Columbus, OH. The item has an annual demand of 20,000 units, which transpires at a relatively steady rate throughout the year. The fixed cost of replenishing the finished goods inventory at the Paducah plant is $200, and the fixed replenishment cost at the Columbus DC is $50. Annual holding costs at Paducah are $20 per unit. Annual holding costs at the Columbus DC at $30 per unit. (For the purposes of this problem, you can assume that replenishment of finished goods at the Paducah plant is sufficiently close to instantaneous to allow you to ignore the effects of changes in the average inventory level as production proceeds.)

(a) Use the methods developed in Section 3.6 to compute the optimal order quantity at the plant and at the DC assuming decentralized inventory control.

(b) Use the methods developed in Section 3.6 to compute the optimal order quantity at the plant and at the DC assuming centralized inventory control.

Reference no: EM131408677

Questions Cloud

Compute the updated echelon base-stock levels for the stage : Compute the updated echelon base-stock levels for the Stage Three Incorporated example given the same distribution of demand at the field warehouse, but with a penalty cost that is 20% of the original value (i.e., b = $10) and a 50% increase in ec..

Determine the genetic code of organism : NASA has identified a new microbe present on Mars and requests that you determine the genetic code of this organism. To accomplish this goal, you isolate an extract from this microbe that contains all the components necessary for protein synthesis..

Explore implications of increasing detail of project plan : Post an essay in which you apply your knowledge of project planning.- Explore the implications of increasing the detail of a project plan during a project.

Offspring phenotype with punnet squares : How do you find the possible offspring phenotype with punnet squares?

Compute the optimal order quantity at the plan : Use the methods developed in Section 3.6 to compute the optimal order quantity at the plant and at the DC assuming decentralized inventory control.

Observe the process of osmosis : Observe the process of osmosis. Determine whether water represented by animated blue arrows, moves into, stays in equilibrium, or moves out of the cell. Observe what happens to the shape and size of the cell.

What is the annual cost of this replenishment policy : Since this is a relatively fast-moving item at this store, the current replenishment policy calls for daily (on average) replenishments (i.e., an order quantity of 5 units).

Does the culture support the company status quo : Does the culture support the company status quo, or does the culture need to change to support new strategies you are developing? If the culture needs to change, you need to develop a specific strategy to change it.

Adequate stimulus for receptors in the ear : What do you think is the adequate stimulus for receptors in the ear? Can you think of a stimulus that would inappropriately activate the sensory receptors in the ear if the stimulus had enough intensity?

User Account

All Pages