The jewelry firm operates 200 days per year. The supplier quotes a price of $8 per stone for quantities of 600 stones or more, $9 per stone form orders of 400 to 599 stones, and $10 per stone for lesser quantities. Would you recommend that the office manager use the optimal order size instead of 200 boxes?Ī jewelry firm buys semiprecious stones to make bracelets and rings. The partners of the firm expect the office to be managed ‘in a cost-efficient manner’. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $60 to order and receive a shipment of paper.Ī) What order size would minimize the sum of annual ordering and carrying cost?ī) Compute the total annual cost using your order size from part a.Ĭ) The office manager is currently using an order size of 200 boxes. Using the EOQ, recalculate the Total Inventory Annual Costs.Ĭan anybody help with solutions to the following questions?Ī large firm uses an average of 40 boxes of copier paper a day. What is the Carrying Cost of one kg of beef?ĥ.Ĝalculate the current Total Annual Inventory Cost.Ħ.Ĝalculate Chico’s economic order quantity (EOQ).ħ. Ģ.Ĝalculate Chico’s current Order Quantity. Please calculate the following:ġ.Ĝalculate how many kgs Chico purchases in a year. The lead time to place a beef order up to delivery is 3 days.Ĭhico has just learned about something called the EOQ and now thinks if he might be able to save money by changing his order pattern. Chico pays $10.00 per kg for his ground beef. Chico has also determined that inventory spoilage is 1% and his interest rate on debt is 8%. Chico’s chili is so popular that it uses about 120 kgs of ground beef per day and he is open 348 days (50 weeks) per year.Ĭhico has been ordering beef once per week and has determined that it takes a ½ hour to place an order. Chico makes a variety of different types of chili and customers can combine it together with any sides they like. Chico’s Chili (CC) is well known for making the best chili in Chicago.
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