Paul's Pasta Pinwheels Essay
1. The current order quantity for Paul’s Pasta Pinwheels is 200 boxes. The order cost is $4 per order, the holding cost is $.40 per box per year, and the annual demand is 500 boxes per year.
Current order quantity 200 boxes Ordering cost $ 4.00 per order holding costs $ 0.40 per box Annual demand 500 boxes
a. Calculate the annual holding cost plus the annual ordering cost to get the total costs when using an order quantity of 200 boxes. Order quantity 200 Boxes Annual ordering Costs =500 boxes /200 boxes* cost per order Annual ordering Costs =2.5 orders *$4 per order Annual ordering Costs $ 10.00 Annual holding costs = average inventory level* holding cost per unit per year Annual holding costs …show more content…
Office Express sells office suppliers to businesses on a membership basis--i.e., walk-in customers without a membership are not allowed. The company delivers supplies directly to the purchaser as long as minimum purchase of $100 is made. In order to encourage bulk orders, Office Express offers the following discount schedule on purchase quantities of boxes of paper. Larry's lumber has an annual demand of 5,000 boxes of paper, a setup cost of $10 per order, and a holding cost of 22 percent of the purchase price. Calculate the optimal order quantity.
1-100 boxes $5 per box
100-249 boxes $4.75 per box
250-499 boxes $4.50 per box
500 or more $4.25 per box D 5000 S 10 slide price holding % h q*=(2D*s/h)^.5
1-100 5 0.22 1.1 150.76
100-249 4.75 0.22 1.045 154.67
250-499 4.5 0.22 0.99 158.91
500 or ovr 4.25 0.22 0.935 163.52 it is optimal as it locate in slide 100-249
6. A watch repair shop buys batteries for a variety of products. The most frequent battery purchase is for a Y300, with demand of 3,000 per year. the order cost is $15 per order, and the holding cost is $0.50 per battery. Given the following price schedule, calculate the optimal order.
Number of Batteries Price
1-250 $6.00
250-499 $5.50
500-999 $5.00
1,000 or more $4.75 D 300 S 15 slide price h q*=(2D*s/h)^.5
1-250 6 0.5 67.08
250-499 5.5 0.5
Current order quantity 200 boxes Ordering cost $ 4.00 per order holding costs $ 0.40 per box Annual demand 500 boxes
a. Calculate the annual holding cost plus the annual ordering cost to get the total costs when using an order quantity of 200 boxes. Order quantity 200 Boxes Annual ordering Costs =500 boxes /200 boxes* cost per order Annual ordering Costs =2.5 orders *$4 per order Annual ordering Costs $ 10.00 Annual holding costs = average inventory level* holding cost per unit per year Annual holding costs …show more content…
Office Express sells office suppliers to businesses on a membership basis--i.e., walk-in customers without a membership are not allowed. The company delivers supplies directly to the purchaser as long as minimum purchase of $100 is made. In order to encourage bulk orders, Office Express offers the following discount schedule on purchase quantities of boxes of paper. Larry's lumber has an annual demand of 5,000 boxes of paper, a setup cost of $10 per order, and a holding cost of 22 percent of the purchase price. Calculate the optimal order quantity.
1-100 boxes $5 per box
100-249 boxes $4.75 per box
250-499 boxes $4.50 per box
500 or more $4.25 per box D 5000 S 10 slide price holding % h q*=(2D*s/h)^.5
1-100 5 0.22 1.1 150.76
100-249 4.75 0.22 1.045 154.67
250-499 4.5 0.22 0.99 158.91
500 or ovr 4.25 0.22 0.935 163.52 it is optimal as it locate in slide 100-249
6. A watch repair shop buys batteries for a variety of products. The most frequent battery purchase is for a Y300, with demand of 3,000 per year. the order cost is $15 per order, and the holding cost is $0.50 per battery. Given the following price schedule, calculate the optimal order.
Number of Batteries Price
1-250 $6.00
250-499 $5.50
500-999 $5.00
1,000 or more $4.75 D 300 S 15 slide price h q*=(2D*s/h)^.5
1-250 6 0.5 67.08
250-499 5.5 0.5