Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PA 1 2 - 4 ( Algo ) Bruno Fruscalzo decided to start a small... Bruno Fruscalzo decided to start a smal production faclity in

PA 12-4(Algo) Bruno Fruscalzo decided to start a small...
Bruno Fruscalzo decided to start a smal production faclity in Sydney to sell gelato to the local restaurants. His local milk suppler
charges $0.50 per kilogram of milk plus a $15 delwery fee (the $15 fee is independent of the amount orderedi). Bruno's holding cost is
$0.01 per kilogram per month. He needs 9.000 kilograms of milk per month.
a. Suppose Bruno orders 8,750 kilograms each time. What is his average imventory (in idograms)?
b. Suppose Bruno orders 8,000 idograms each time. How many orders does he place with his suppler each year?
Note: Round your answer to 1 decimal place.
N.mber of ordars
c. How many kilograms should Bruno order from his suppler with each order to minimize the sum of the ordering and holding costs?
Costs
kilograma
d. If Bruno's storage vessel can hold only 3,250 lolograms of milk, what would be Bruno's annual ordering and hoiding costs if he
orders this amount?
Costs
e. If Bruno's storage wessel can hold only 5,000 klograms of milk, what would be Bruno's annual ordering and hoiding costs if he
orders this amount?
Costs
t. Bruno's supplier's truck can carry 20,000 kilograms of milk. The supplier does not want to delwer to more than three customers
with each truck. Thus, the supplier requires a minimum oeder quantity of 6,500 kilograms. 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 hoid 6,500
idograms.
Costs
Bruno's supplier offers a 2 percent discount when a customer orders a ful truck, which is 20,000 klograms. Assume Bruno can
store that quantity and the product will not spoil. If Bruno orders a ful truck, what would be the annual inventory holding and
ordering cost incurred per kilogram of milk?
Note: Round your answer to 3 decimal places.
image text in transcribed

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

Management

Authors: Ricky W. Griffin

11th edition

111196971X, 978-1111969714

More Books

Students also viewed these General Management questions

Question

Week 3: Moment of force: scalar formulation...explain it

Answered: 1 week ago