Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PA 12-1 (Algo) Millennium Liquors is a wholesaler... Millennium Liquors is a wholesaler of sparkling wines. Its most popular product is the French Bete Noire,

image text in transcribed

image text in transcribed

PA 12-1 (Algo) Millennium Liquors is a wholesaler... 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 $100, there is a $250 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 Millennium's 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 250 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 125 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. . 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

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 And The Arts

Authors: William J. Byrnes

5th Edition

0415663296, 978-0415663298

More Books

Students also viewed these General Management questions