Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

[ Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to the local restaurants. His local milk supplier charges $

[Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to the local restaurants. His local milk supplier charges $0.50 per kg of milk plus a $20 delivery fee (the $20 fee is independent of the amount ordered). Bruno's holding cost is $0.03 per kg per month. He needs 9000 kg of milk per month.
A.Suppose Bruno orders 9000 kg each time. What is his average inventory (in kg)?
B.Suppose Bruno orders 7000 kg each time. How many orders does he place with his supplier each year?
C. How many kg should Bruno order from his supplier with each order to minimize the sum of the ordering and holding costs?
D.If Bruno's storage vessel can hold only 3000 kg of milk, what would be Bruno's annual ordering and holding costs?
E.If Bruno's storage vessel can hold only 6000 kg of milk, what would be Bruno's annual ordering and holding costs?
F.Bruno's supplier's truck can carry 20,000 kg of milk. The supplier does not want to deliver to more than three customers with each truck. Thus, the supplier requires a minimum order quantity of 6500 kg. If Bruno orders the minimum amount, what would be the sum of his annual ordering and holding costs? Assume he has a storage vessel large enough to hold 6500 kg.
G.Bruno's supplier offers a 5 percent discount when a customer orders a full truck, which is 20,000 kg. Assume Bruno can store that quantity and the product will not spoil. If Bruno orders a full truck, what would be the inventory holding and ordering cost incurred per kg of milk?

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

Essentials Of Management Information Systems

Authors: Jane Laudon

8th Edition

013602579X, 9780136025795

More Books

Students also viewed these General Management questions