Question
Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand
Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire, which is shipped directly from France. Weekly demand is 40 cases. Millennium purchases each case for $105, there is a $350 fixed cost for each order (independent of the quantity ordered), and its annual holding cost is 15 percent. Assume 52 weeks per year.
A: What order quantity minimizes Millenniums annual ordering and holding costs?
Note: Do not round intermediate calculations. Round your answer to the nearest whole number.
B: If Millennium chooses to order 325 cases each time, what is the sum of its annual ordering and holding costs?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
C: If Millennium chooses to order 100 cases each time, what is the sum of the ordering and holding costs incurred by each case sold?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
D: If Millennium is restricted to ordering in multiples of 50 cases (e.g., 50, 100, 150, etc.), how many cases should it order to minimize its annual ordering and holding costs?
Note: Do not round intermediate calculations. Round your answer to the nearest whole number.
E: Millennium is offered a 5 percent discount if it purchases at least 1,000 cases. If it decides to take advantage of this discount, what is the sum of its annual ordering and holding costs?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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