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

After working for 30 years, In the table given below the Distribution Manag...

In the table given below the Distribution Manager is expected to service these DCs as per the demands placed. If the actual sales after completing week one is as follows, what woul

Modelling, what are the characteristics of a good model

what are the characteristics of a good model

Ethical issues that could comes in the underwriting process, What is the di...

What is the difference between rating and underwriting and how is it used? Identify and discuss any ethical issues that could arise in the underwriting process.

Explain the problems associated with performance measurement, Question 1: ...

Question 1: The objective of Government organizations is not for profit. Explain the problems associated with performance measurement in not for profit organisations and ho

Descibe the stages of contract formation, Maria, who lives in Seattle, sent...

Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, "Koji, I think your 2003 Ford SUV is worth $20,000. I will give you $20,000 cash for it." Koji receiv

Explain what other kinds of information would be helpful, A pension fund ha...

A pension fund has accumulated $1 million in a retirement plan for James B. Smith, who retired this month at age 65. If Mr. Smith has a life expectancy of 75 years, what is the min

Explain elements of a typical scope statemen, Analyze the elements of a typ...

Analyze the elements of a typical scope statement and the significance of each element. As a project leader, determine how you would communicate the scope of a project to the proje

Legal rules for recovery of the amounts, MJZ Corporation had a checking acc...

MJZ Corporation had a checking account with Gulfstream Bank. So that customers who close their accounts would not be embarrassed by having their checks bounce, the bank routinely h

Describe analyze the elements of a typical scope statement, Analyze the ele...

Analyze the elements of a typical scope statement and the significance of each element. As a project leader, determine how you would communicate the scope of a project to the proje

Explain cause and effect diagram and pareto analysis, What are the advantag...

What are the advantages and disadvantages of using a Cause and Effect diagram and Pareto Analysis in terms of analyzing quality issues? Respond to at least two of your classmates'

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