Compute the optimal order size and maximum inventory level

Assignment Help Operation Management

Reference no: EM131375070

The Berry Farm produces organically grown greenhouse tomatoes that are sold to area grocery stores. The annual demand for Berry’s tomatoes is 270,000 pounds. The farm is able to produce 305,000 pounds annually. The cost to transport the tomatoes from the farm to the stores is $620 per load. The annual carrying cost is $0.12 per pound.

a. Compute the optimal order size, the maximum inventory level, and the total minimum cost.

b. If Berry can increase production capacity to 360,000 tomatoes per year, will it reduce total inventory cost?

Reference no: EM131375070

Questions Cloud

Comment on the general involvement of religion : Comment on the general involvement of religion in U.S. public life, and particularly in the workplace. If a Puritan religious leader were suddenly to show up at your most recent job site, how might you explain the issues related to religion to him?

Details strategic benefits of business inelegance systems : Discuss in details the strategic benefits of Business Inelegance systems. Describe several reasons why it is difficult to protect information resources AND compare and contrast risk management and risk analysis. Explain the important role that inform..

Outline the steps involved in the controlling process : How is concavity determined for an interval on a given function? Why did Lincoln announce, early in the Civil War, that he would not free enslaved people? What role does behavior modification play in motivation of employees? Outline the steps involve..

What audience do you think the commercials target : Think of tv shows you watch or have seen, select option a) or option b) from the following options. Record the information (role, gender, ethnicity, social class, sexual orientation and behaviors) about the principal and secondary characters on the R..

Compute the optimal order size and maximum inventory level : The Berry Farm produces organically grown greenhouse tomatoes that are sold to area grocery stores. The annual demand for Berry’s tomatoes is 270,000 pounds. The farm is able to produce 305,000 pounds annually. Compute the optimal order size, the max..

Process strategies would be appropriate for auto industry : Which of the following process strategies would be most appropriate for the auto industry?

Highlighting benefits of production and control processes : How do I write a memo to new employees highlighting the benefits of production and control processes At Nissan, with an overview of the importance of productivity, quality, and relationship between the two concepts?

The initial inventory has no holding cost in first period : Ram? Roy's firm has developed the following? supply, demand,? cost, and inventory data: Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. Allocating production capacity to meet demand at a min..

Why is the knowledge of political environment important : Why is the knowledge of the political environment important when entering a foreign market? How do domestic companies identify the appropriate partners when they need to establish a global supply chain? What do the marketers need to do to adapt domes..

User Account

All Pages