The Bucks Grande exhibition baseball team plays 50 weeks each year and uses an a

Question

The Bucks Grande exhibition baseball team plays 50 weeks each year and uses an average of 310 baseballs per week. The team orders baseballs from Coopers-Town Inc., a ball manufacturer noted for six-sigma level consistency and high product quality. The cost to order baseballs is S100 per order and the annual holding cost per ball is 37% of the purchase price. Coopers-Tows price structure is shown in the table below. How many baseballs should the team buy per order? The team should buy 5,000 baseballs per order. (Enter your response rounded to the nearest whole number.) What is the total annual cost associated with the best order quantity? The total annual cost is S . (Enter your response rounded to the nearest whole number.)

Explanation / Answer

I am assuming the answer given in part a is correct.

b) Total cost = holding cost + ordering cost+ purchase

= (order quantity/2) x holding cost per unit per year + (annual demand/order quantity) x cost per order+( units* price per unit)

=((5000/2)*0.37*6.55)+(((50*310)/5000)*100)+(5000*6.55)

=6058.75+310+32750=$39,118.75

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