What is the total cost arising from optimal order quantity

Assignment Help Operation Management

Reference no: EM131628658

The Krewe of Orpheus

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price.

1. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. How long does it take to produce the optimal batch size? 7 weeks, 8 weeks, 9 weeks, or 10 weeks.

2. The supplier offers the Krewe of Orpheus a deal; if they will buy at least 50,000 at a time, they will pay only 4.99 cents each, and if they buy at least 100,000 at a time, they will pay only 4.98 cents each. What is the total cost arising from the optimal order quantity? A. $29,521.78 B. $29,616.50 C. $29,668.93 D. $29,718.75.

3. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What is the average inventory if they produce an optimal batch size? A. 7256 B. 7528 C. 66224 D. 6934.

Reference no: EM131628658

Questions Cloud

Analyze the implementation of legal policies : Evaluate the impact of these issues and recommend specific organizational changes that will address them and provide a rationale for your suggestions.

Prepare an income statement : Prepare an income statement, statement of changes in stockholders' equity, period-end balance sheet, and statement of cash flows

What is the average power density radiated by the dipole : A 1 m long dipole is excited by a 1 MHz current with an amplitude of 12 A. What is the average power density radiated by the dipole at a distance of 5 km.

How do you see health care social media in the digital era : Share your thoughts on healthcare and what role social media can or cannot play? How do you see Health Care Social Media in the Digital Era?

What is the total cost arising from optimal order quantity : The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. What is the total cost arising from the optimal order quantity?

Obtain an estimate for the antenna directivity in db : The radiation pattern of a circular parabolic-reflector antenna consists of a circular major lobe with a half-power beamwidth of 3? and a few minor lobes.

Construct an entity relationship diagram : HS2011 - Systems Analysis and Design - Construct an Entity Relationship Diagram using Microsoft VISIO tools based on the case study

What are the major limitations of the balance sheet : What are the major limitations of the balance sheet as a source of information, and how can your role as an accountant ensure that the information presented

Use attribution theory : Explain how you would use attribution theory in the following situations: You are the manager in a retail store.

User Account

All Pages