3) HMIL manufactures Kappa engines (besides other products). The firm buys valves for its Kappa engines...
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3) HMIL manufactures Kappa engines (besides other products). The firm buys valves for its Kappa engines from REVL. The demand is for fifteen thousand valves per month. HMIL incurs a fixed order placement, transportation, and receiving cost of four hundred dollars each time an order for valves is placed with REVL. HMIL incurs an annual holding cost of twenty percent. REVL uses an all unit discount pricing schedule as given in the table. Minimum Quantity Maximum Quantity Price per unit ($) 0 20,000 19,999 39,999 40,000 and above 1.00 0.98 0.96 HMIL's supply chain manager wants to evaluate the number of valves she should order in each lot (price and quantity that gives the lowest total cost); she needs to calculate the: a) Optimal lot size for the valves b) Total annual costs for the discount policy 3) HMIL manufactures Kappa engines (besides other products). The firm buys valves for its Kappa engines from REVL. The demand is for fifteen thousand valves per month. HMIL incurs a fixed order placement, transportation, and receiving cost of four hundred dollars each time an order for valves is placed with REVL. HMIL incurs an annual holding cost of twenty percent. REVL uses an all unit discount pricing schedule as given in the table. Minimum Quantity Maximum Quantity Price per unit ($) 0 20,000 19,999 39,999 40,000 and above 1.00 0.98 0.96 HMIL's supply chain manager wants to evaluate the number of valves she should order in each lot (price and quantity that gives the lowest total cost); she needs to calculate the: a) Optimal lot size for the valves b) Total annual costs for the discount policy
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