Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A Kathmandu based solar panel manufacturing company that operates 250 days per year requires50,000 solar cells on an annual basis to assemble their panels. The

A Kathmandu based solar panel manufacturing company that operates 250 days per year requires50,000 solar cells on an annual basis to assemble their panels. The annual holding cost per solar cell isRs. 50. They are currently manufacturing the solar cells and have a production rate of 1000 cells per day.The cost to setup the machinery to begin a production batch costs the company Rs. 10,000 per setup.The company has discovered another solar cell manufacturer in China that can supply the cells at acheaper cost, but ordering the product from them costs Rs. 50,000 per order with an average lead timeof 50 days and a standard deviation of lead time of 15 days. The company will decide to purchase thecells instead of manufacturing it only if it lowers their total cost (product, setup and holding costs). If thecompany wants to maintain a 95% service level what is the maximum price per cell that the companywould be willing to pay to the subcontractor? (95% p value has a Z-score of 1.65)

Step by Step Solution

3.57 Rating (161 Votes )

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

Operations Management Managing Global Supply Chains

Authors: Ray R. Venkataraman, Jeffrey K. Pinto

1st edition

1506302935, 1506302939, 978-1506302935

More Books

Students also viewed these Mathematics questions