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help Suppose that your firm manufactures rubber chickens. Monthly demand for the chickens is 32,000 units. Setup cost per order is $82, and the annual
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Suppose that your firm manufactures rubber chickens. Monthly demand for the chickens is 32,000 units. Setup cost per order is $82, and the annual holding cost percentage is 17%. The chickens cost $8 to produce and are sold for $18. a) If you have one warehouse, the economic order quantity for the chickens is units (round your response to the nearest integer). The total of the annual setup and holding costs of this quantity is $ (round your response to the nearest whole dollar). b) Suppose that you have 25 warehouses instead of one, and total demand is equally distributed among the warehouses. If setup and holding costs are the same in the smaller warehouses as they would be for the single large warehouse, the EOQ for the chickens at each of the 25 warehouses is units (round your response to the nearest integen. The total of the annual setup and holding costs at each warehouse is $ (round your response to the nearest whole dollar). The total of the company's annual setup and holding costs is S (round your response to the nearest whole dollar). c) Using centralized warehousing as in part (a) implies that products must be shipped over longer distances. Suppose that shipping costs 50.77 per unit when using one warehouse and 50.66 per unit when using 25 warehouses. Which option should the company choose, considering all relevant costs? Annual shipping cost for one warehouse is s (round your response to the nearest whole dollar). Annual shipping cost for 25 warehouses is $ (round your response to the nearest whole dollar). The total of annual setup and holding and shipping costs for one warehouse is $ (round your response to the nearest whole doilar). The total of annual setup and holding and shipping costs for 25 warehouses is $ (round your response to the nearest whole dollar). The company should choose the option of warehouse(s) Step by Step Solution
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