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 is not one of the three types of specifications, Which of the follo...

Which of the following is not one of the three types of specifications discussed in the text? Answer Design specifications Material specifications Performance specifica

The owners it person has alerted him to several problems, The graphic desig...

The graphic design shop where you work as the Account Manager is doing well. Just last year, the owner hired three new designers and a receptionist, bringing the total number of em

Explain homogenous group, In a diverse team, a "fault-line" refers to: a. C...

In a diverse team, a "fault-line" refers to: a. Cases in which a team tends to find fault or blame in the other team members rather than their own behaviour b. Cases in which group

What are few of the advantages in having a diverse workforce, Scenario Y...

Scenario You work for a large financial institution that in the past ten years has developed new products and services that appeal to a very diverse customer base located throug

Class work, define the following key terms in product layout: a) Product in...

define the following key terms in product layout: a) Product interval time b) Product duration (throughput time) c) Assembly line balancing

Explain compensation plan, Do you believe a compensation plan based 100% on...

Do you believe a compensation plan based 100% on commission would ever be justified? Give an example for either option.

How is the chase demand strategy opposite of level capacity, How is the cha...

How is the chase demand strategy opposite of level capacity? Chase demand strategies: Chase demand strategies are the totally opposite of level capacity in which the orga

Explain ethics training back to the workplace be maximized, Define the term...

Define the term, transfer of learning. (2) A critical issue in training is the transfer of training, and ethics training is no exception. How could the transfer of ethics training

Problem, a firm isconsidering replacement of a machien, whoes cost price is...

a firm isconsidering replacement of a machien, whoes cost price is rs 12200 and scrap value is rs 200 the running cost is rupee given below year running cost 1 200 2 50

Imagine which you just made manufacturing changes, Imagine that you just ma...

Imagine that you just made manufacturing changes to your product so it is now easily recyclable. How would you publicize these changes?

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