Question Details
A food processor uses approximately 28,560 glass jars a month
for its fruit juice product. Because of storage limitations, a lot
size of 4,000 jars has been used. Monthly holding cost is 18 cents
per jar, and reordering cost is $60 per order. The company operates
an average of 20 days a month.
|
a. |
What monthly penalty is the company incurring by its present
order size? (Round your intermediate order quantity to
nearest whole number and final answer to 2 decimal places. Omit the
"$" sign in your response.)
|
Penalty |
$ |
b. |
The manager would prefer ordering 9 times each month but would
have to justify any change in order size. One possibility is to
simplify order processing to reduce the ordering cost. What
ordering cost would enable the manager to justify ordering every
other day? (Round your intermediate order
quantities to whole number and the other values to 2 decimal
places.Omit the "$" sign in your
response.)
|
Cost |
$ |
c. |
Suppose that after investigating ordering cost, the manager is
able to reduce it to $50. How else could the manager justify using
an order size that would be consistent with ordering every other
day? (Round your intermediate order
quantities to whole number and final answer to 4
decimal places. Omit the "$" sign in your response.)
|
The carrying cost
happened to increase rather dramatically from $.18 to approximately
$ . |
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DATE ANSWEREDDec 08, 2020
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