Safarl File Edit View History Bookmarks Develop Window Help Joe Birra needs to p
ID: 361057 • Letter: S
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Safarl File Edit View History Bookmarks Develop Window Help Joe Birra needs to purchase malt for his micro-brew production. His supplier charges $25 per delivery (no matter how much is delivered) and $1.15 per gallon. Joe's annual holding cost is 35% of the price per gallon. Joe uses 200 gallons of malt per week. a. Suppose Joe orders 125 gallons each time. What is his average inventoryn 63 gallons (Round your answer to 2 decimal places.) h Suppose Joe orders 1750 gallions each time. How many orders does he place with 594 orders his supplier each year? How many gallons should Joe order from his suppier with each order to minimize the sum of ordering and holding costs? t1,137|gallons (Round your answer to 3 decimal places.) Suppose Joe orders 2000 gallons each time he places an order with the supplier. What is the sum of ordering and holding costs per galon? d. S 0.051 per galilon Round your answer to 2 decimal places.) Suppose Joe orders the quantity from part (c) that minimizes the sum of the ordering and holding costs each time he places an order with the supplier what is ·the annual cost of the EOQ expressed as a percentage of the annual purchase cost? Joe's supplier only accepts orders that are an integer multiple of 1,000 gallons. t: how much should Joe order to minimize ordering and holding costs per galon? 1,000 gallons Joe's supplier offers a 3.00% discount if Joe is willing to purchase 8000 gallons or g. more. What would Joe's total annual cost (purchasing, ordering and hoilding) be if $ 13,195 he were to take advantage of the discount?Explanation / Answer
Answer A:- Average Inventory:- 125/2 = 62.5 gallon
Answer B:- No of Orders = D/Q = (200 gallons/week × 52 weeks/year) / 1750 gallons = 5.94
Answer C:- EOQ = Sqrt (2 × 25 × 200 × 52) / (1.15 × 0.35) = 1136.63
Answer D:- For 2000 order quantity, Annual order cost = 5.20 orders × $25 = $130.00. Annual holding cost = .5 (2000 × 1.15 × 0.35) = $402.50
Annual order + holding costs = 130.00 + 402.50 =$532.50
Answer F:- From part C, the EOQ = 1136.63. For 1000 order quantity, Annual order cost = 10.40 orders × $25 = $260.00. Annual holding cost = .5 (1000 × 1.15 × 0.35) = $201.25
Annual order + holding costs = 260.00 + 201.25 = $461.25
For 2000 order quantity, Annual order cost = 5.20 orders × $25 = $130.00. Annual holding cost = .5 (2000 × 1.15 × 0.35) = $402.50
Annual order + holding costs = 130.00 + 402.50 =$532.50
An order size of 1000 has the lowest annual order + holding costs
Answer G:- For 8000 order quantity, Annual order cost = (10400/8000) orders × $25 = $32.50. Annual holding cost = .5 (8000 × 1.12 × 0.35) = $1561.70
Annual order + holding costs + purchasing cost = 32.50 + 1561.70 + 11601.2 = $13195.40
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