The objective is to minimize total annual costs of holding

Assignment Help Operation Management

Reference no: EM132182860

As a manager of an operation’s unit, your department uses 2,000 boxes of 2” screws each year. The supplier quotes you a price of $20 per box for an order size of 499 boxes or less, a price of $19 per box for orders of 500 to 999 boxes, and a price of $18 per box for an order of 1,000 or more boxes. You assign a holding cost of 20 percent of the price of the unit to this inventory. What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering? Assume ordering cost is $50/order.

Reference no: EM132182860

Questions Cloud

Lateness-turnover and organizational citizenship behavior : What effects, if any, do you see these actions as having on performance, absenteeism, lateness, turnover and "organizational citizenship" behavior?

Present views on the benefits of project management : Distinguish between the past and present views on the benefits of Project Management.

Why are the ladies shunning coach : Read this Case Study and evaluate 'Why are the ladies shunning Coach?'. What, in your opinion, are the conditions contributing to Coach's demise?

Exchanged between managers and workers in your organisation : Describe the ways in which ideas are exchanged between managers and workers in your organisation.

The objective is to minimize total annual costs of holding : What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering?

Weekly demand for particular product averages : Weekly demand for a particular product averages 60 units, with a standard deviation of 5. How many units should be ordered?

Describe the importance of seeking improvements : Describe the importance of seeking improvements & innovative practices in a Health care industry?

What is the economic order quantity for light beer : Daily holding costs are equal to 3 percent of the cost of the beer. What is the economic order quantity for Light beer?

Integrated marketing communications programs : Discuss how the digital revolution is impacting the ways marketers plan and implement their integrated marketing communications (IMCs) programs.

User Account

All Pages