Suppose that the buttons used in the calculators cost $0.02 each and the company estimates a fixed

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Suppose that the buttons used in the calculators cost $0.02 each and the company estimates a fixed cost of $12 for placing and receiving orders of the buttons from an outside supplier. Assume that holding costs are based on a 24 percent annual interest rate and that there are 48 weeks to a year. Using the gross requirements schedule for the buttons determined in Problem 41, what order policy does the Silver–Meal heuristic recommend for the buttons?

(Hint: Express h as a cost per 10,000 units and divide each demand by 10,000.)

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Production And Operations Analysis

ISBN: 9781478623069

7th Edition

Authors: Steven Nahmias, Tava Lennon Olsen

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