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

Explain linking purchasing to the corporate strategy, Q. Explain linking pu...

Q. Explain linking purchasing to the corporate strategy? Linking purchasing to the corporate strategy Wording of Professor Paul Cousin about, supply chain management is as r

Explain what standard time is applicable for operation, A recently negotiat...

A recently negotiated union contract allows workers in a shipping department 24 minutes for rest, 10 minutes for personal time, and 14 minutes for delays for each 4 hours worked. A

Explain what is the value creation frontier, 1.Why does each generic busine...

1.Why does each generic business model require a difficult set of business-level strategies? Give examples of pairs of companies in: (a) the computer industry; (b) the electronics

Explain optimum service level is what percent, In a single period model if ...

In a single period model if shortage cost is four times excess cost then the optimum service level is what percent?

Define the operations strategy, What is operations strategy?  Answer: Op...

What is operations strategy?  Answer: Operations strategy is the plan and actions taken at operational level to support and implement the business strategy. An operations strate

Financial executives helped by hr department, How might an HR department he...

How might an HR department help to develop financial executives who are ethical leaders and mentors?

Describe various barriers to successful communication, Describe various bar...

Describe various barriers to successful communication. (i) More levels in the organisation structure by which information has to proceeds. (ii) Ill-structured and long chan

Explain protocols are important in medicine, Protocols are important in med...

Protocols are important in medicine. We use them anytime that a particularly important process needs to be completed in a sequential way for the benefit of our patients. What is yo

Sceduling for the short term, what are the advantage to finite capacity sch...

what are the advantage to finite capacity scheduling ?

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