How much palm oil should she purchase with each order

Assignment Help Operation Management

Reference no: EM132143615

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 $65 delivery fee per order (which is independent of the order size) and $5.75 per kg. Sarah’s annual holding cost is 25%. 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)? not attempted 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 not attempted (Round your answer to 3 decimal places.)

c. If Sarah orders 8200 kgs with each order, what would be sum of ordering and holding costs per kg sold not attemptedper 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 not attempted

Reference no: EM132143615

Questions Cloud

Describe a specific gap in the delivery of healthcare : HCM 340 : Describe a specific gap in the delivery of healthcare. Include the specific population affected by the gap.

Basic nature of the transformational leadership model : Describe the basic nature of the transformational leadership model.

Implemented in order to eliminate this vulnerability : Which additional security measures should be implemented in order to eliminate this vulnerability?

Er database modeling question : Employees have an id, name, department and datejoined. A manager who is also an employee is managing a department and can be a manager of several

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

Analyze the elements of media choices : Analyze the elements of media choices for conducting an internal total rewards campaign to determine which is hardest to evaluate from the return on investment.

Whole foods taken in approprately planning strategy : What steps has Whole Foods taken in approprately planning strategy? Assuming WFoods must develop a new business model, how should they go about this?

Quantitative analysis for managers : What is the essence of Decision Theory? How can the concept of decision theory be used in business, personal or academic activities?

Is forward rate pricing rate agreements : Is Forward Rate Pricing Rate Agreements. Useful for government contracting? Are they risky? Is it useful for planning a program?

User Account

All Pages