Describe what order quantity is optimal, Operation Management

Assignment Help:

The manager of a car wash received a revised price list from the vendor who supplies soap, and a promise of a shorter lead time for deliveries. Formerly the lead time was four days, but now the vendor promises a reduction of 25 percent in that time. Annual usage of soap is 4500 gallons. The car wash is open 360 days a year. Assume that daily usage is normal, and that it has a standard deviation of 2 gallons per day. The ordering cost is $30 and annual carrying cost is $3 a gallon. The revised price list(cost per gallon) is shown in the following table:

Quantity unit price

1-399 $2
400-799 $1.70
800+ $1.62

a. What order quantity is optimal?


Related Discussions:- Describe what order quantity is optimal

How to avoid penalties, Select an article relating to workplace safety and...

Select an article relating to workplace safety and answer the following questions: 1. briefly summarize the article 2. What alternatives could the place of business have taken in o

Explain what the hr systems might look for at wal-mart, o Compare what the ...

o Compare what the HR systems might look for at Wal-Mart, a new web startup company, and a law firm. How would you achieve a sustainable competitive advantage through HRM systems i

Explain compensation of expatriates, For a company with overseas operations...

For a company with overseas operations, some critical concerns for success are the identification, selection, and compensation of expatriates. Answer True or False

Explain individual incentives used by organizations, Give examples of indiv...

Give examples of individual incentives used by organizations, why these are or are not successful?

A try and cut, would you give an example ? haw it calculate.?

would you give an example ? haw it calculate.?

Constraint Management, Elucidate Theory of Constraints and constraint manag...

Elucidate Theory of Constraints and constraint managment

Explain e-activity evaluate the lessons, From the e-Activity, evaluate the ...

From the e-Activity, evaluate the lessons learned in this chapter to determine which single lesson would be most beneficial to the company you researched. Provide specific examples

Explain expected monetary value criterion, The product design group of Flor...

The product design group of Flores Electric Supplies, Inc., has determined that it needs to design a new series of switches. It must decide on one of three design strategies. The m

Explain advantages of budgets, Explain advantages of budgets. Advantag...

Explain advantages of budgets. Advantages of Budgets: (i) Actions plans and policy taken are all reflected into the budgetary control system. Now here is a formal recognit

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd