Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.30 per stone for quantities of 600 stones

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.30 per stone for quantities of 600 stones or more, $8.70 per stone for orders of 400 to 599 stones, and $9.20 per stone for lesser quantities. The jewelry firm operates 180 days per year. Usage rate is 35 stones per day, and ordering costs are $40. a. If carrying costs are $3 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.)

b. If annual carrying costs are 25 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.)

c. If lead time is 4 working days, at what point should the company reorder? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Planned Giving Management Marketing And Law

Authors: Ronald R. Jordan, Katelyn L. Quynn

3rd Edition

0471679798, 978-0471679790

More Books

Students also viewed these General Management questions

Question

List t he t hree c omponents of ident ity. (p. 3 0)

Answered: 1 week ago