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 current trends in the health care industry, How might a universal h...

How might a universal health insurance program change the current trends in the health care industry? In your opinion, are programs like that offered by Aetna to have surgery condu

Expalin the fundamental ethical principle, How does utilitarianism contradi...

How does utilitarianism contradict the fundamental ethical principle: the end does not justify the means?

Explain what elements interest in the negotiations, Assuming that I am the ...

Assuming that I am the negotiator who is tasked with a salary (on call time, step increases, overtime for captains and majors) and benefits (insurance while employed, insurance aft

Explain what will be the total costs for each alternative, Ergonomics Inc. ...

Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 54 units per day Average lead time = 30 days Item u

Explain how many machines should be purchased, Up, up, and away is a produc...

Up, up, and away is a producer of kites and wind socks. Relevant data on a bottleneck operation in the shop for the upcoming fiscal year are given in the following table: Item Kite

What is the capacity represented by dso, What is the capacity represented b...

What is the capacity represented by "DSO"? a. 56Kbps b. 64 Kbps c. 255 Kbps d. 768 Kbps

Operation process design, #quwhat is operations process design?what are the...

#quwhat is operations process design?what are the factors that effect a process design?estion..

Analyze the relationship between analysis and planning, Analyze the relatio...

Analyze the relationship between analysis, planning, implementation, and control. Provide an example of a product or service that flows through the relationship. Break down this pr

Three methods of system classification, 1. Name three methods of system cla...

1. Name three methods of system classification and typical examples.  Answer: 1. Volume/variety; 2. customer interaction/labour intensity; 3. Boulding's classification.

Explain social media in checking references, I will need at least one page ...

I will need at least one page with cites and references; (use of social media in checking references)

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