Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

JL.81 As a result of many process improvements and IT implementations (like EDI), Big Box-Mart has been able to reduce its order costs from $35.27

image text in transcribed
JL.81 As a result of many process improvements and IT implementations (like EDI), Big Box-Mart has been able to reduce its order costs from \$35.27 to $7.76 when purchasing cases of paper towels from its main paper-products supplier. Annual demand is expected to be 209,000 cases and annual holding costs are $19.99 per caso. Hint a1: This is a purchasing order quantity problem (EOQ), not a production order quantity problem. For this question we are combining a JIT concept (lowe ordering costs) with what you leamed trom a previous chapter (inventory management). If necessary, refer back to that chapter. Hint 32. Remember to use coll roferences in all your lormulas rather than using a rounded input value from a previous calcula fion Based on this intormation, what will be the now optimal order quantity (using the reduced ordering cost)? (Display your answer to the nearest whole number.) When using the reduced orderng cost, as compared to the onginal ordering cost. by how many cases will the average inventory go down? (Display your answer to the nearest whole number.) What wilt be the annual total combined savings to ordering costs and holding costs when wing the recuced onder cost, as cornpared te the orieinal ordering cost? (Display your ariswer to two decimal places.)

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

Stage Management

Authors: Lawrence Stern

8th Edition

0205449735, 978-0205449736

More Books

Students also viewed these General Management questions