Question
A mining company routinely replaces a specific part on a certain type of equipment. The usage rate is 4 0 per week and there is
A mining company routinely replaces a specific part on a certain type of equipment. The usage rate is per week and there is no significant seasonality. The supplier of the part offers the following allunits discount structure:
Range of Q Unit Cost
Q $
Q $
The fixed cost of a replenishment is estimated to be $ and a carrying charge of $$year is used by the company. If the year consists of working week:
a What replenishment size should be used?
b If the supplier was interested in having the mining company acquire at least units at a time, what is the largest unit price they could charge for an order of units
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