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A manager just received a new price list from a supplier. It will now cost $1.00 a box for order quantities of 801 or more boxes, $1.10 a box for 200 to 800 boxes, and $1.20 a box for smaller quantities. Ordering cost is $82 per order and carrying costs are $10 per box a year. The firm uses 3,650 boxes a year. The manager has suggested a "round number" order size of 800 boxes. The manager's rationale is that with a U-shaped cost curve that is fairly flat at its minimum, the difference in total annual cost between 800 and 801 units would be small anyway. What order size would you recommend? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)
Cellular production is often conducted in a U-shaped (horseshoe-shaped) cell, rather than the rectangular cells shown in Figure 2.7b. What might be the advantages of this U shape?
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a firm whether to make or buy a part required in its operation. cost and volume estimate are as follows annual fixed cost make $15000 buy none, variable cost make $60 buy $80, annu
Production Planning Procedure
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