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

Design a operations management system, The purpose of operations management...

The purpose of operations management is to make the best use of productive resources. It entails the design and control of all the systems for the productive use of various raw mat

Explain the replace with similar, Describe the four options highlighted in ...

Describe the four options highlighted in the case study in terms of their feasibility, acceptability and vulnerability. The four options at Chatworth -the adventure playground deci

Explain what is the relationship group cohesiveness, Within and organizatio...

Within and organization, give an example of a formal group and an informal group. What is the relationship group cohesiveness and effectiveness? When might a highly cohesive group

Scope of operational research and scope of financial managem, scope of oper...

scope of operation research & Scope of Financial management

Situational Leadership Theory, Describe possible gaps you observe within Si...

Describe possible gaps you observe within Situational Leadership Theory. What strategies or adjustments in your own behavior, thinking, or worldview might you consider or employ to

Explain retailer franchise system, What is a franchise organization? Is Vic...

What is a franchise organization? Is Victorias Secret A franchise, if so what kind? If not should it be?? 3 types of franchises: 1. manufacturer-sponsored retailer franchise system

Explain employer disciplinary actions, Identify how the issues of due proce...

Identify how the issues of due process and just cause are linked to employer disciplinary actions

Explain effectiveness of the changes made in the us, Evaluate the effective...

Evaluate the effectiveness of the changes made in the US Air Force Academy after the 2005 religious intolerance complaints

Explain what impact did this have on team performance, In 100 words or less...

In 100 words or less, please describe a team situation, which has included the type of people you find it difficult to work with. What impact did this have on team performance? How

Explain division of work (or labour), Explain Division of Work (or Labour)....

Explain Division of Work (or Labour). It is a famous principle of Economics, invented through  Adam Smith  who was the traditional economist. Fayol had advocated Division of wo

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