Determine the optimal tulip inventory policy for HEB

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Reference no: EM132233803

The flower shop of HEB sells tulips with daily sales according to the attached table. The tulips are purchased free on board in Dutch nurseries, which offer the following program of discounts:

If the order is 0 <Q <1000 the cost is $ 20.0 each tulip

If the order is 1000 <Q <2000 the cost is $ 18.0 each tulip

If the order is 2000 <Q <3000 the cost is $ 17.0 each tulip

If the order is 3000 <Q <4000 the cost is $ 16.5 each tulip

If the order is 4000 <Q the cost is $ 16 each tulip

DHL is an international transportation company, which has variable transportation costs $ 1.5 each tulip and offers discounts on fixed costs according to the following program:

If the order is 0 <Q <2500 the cost is $ 2500 per order

If the order is 2500 <Q <4000 the cost is $ 2000 per order

If the order is 4000 <Q the cost is $ 1500 per order

DHL requires payment at the time of boarding and a shipment takes two days to arrive from Dutch nurseries to HEB stores, where tulips are kept under special conditions of humidity and temperature. Consider the daily capital cost of HEB is 0.28 $ / $.

Determine the optimal tulip inventory policy for HEB. The amount to order, when ordering and safety inventory (recommend level of service) and discuss your results and conclusions widely (Analysis of demand or calculate the total costs or Make a graph in excel or identify the optimal policy of ordering graphically, etc.)

Reference no: EM132233803

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