Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PassTheHoney imports honeycombs from Turkey to sell convenient honeycomb snacks. They have two stores, one in San Diego and one in LA. In both
PassTheHoney imports honeycombs from Turkey to sell convenient honeycomb snacks. They have two stores, one in San Diego and one in LA. In both cities, the weekly demands are very similar and remarkably stable over time without uncertainty. Each week, Pass TheHoney has been selling 2000 boxes of honeycombs in each city. One year is 52 weeks. Each store orders separately from their supplier in Turkey. In both stores, PassTheHoney sells one box of honeycombs at $20 to customers, whereas the cost of one box of honeycombs is $4. When placing an order to their supplier in Turkey, the fixed cost of shipping regardless of the order size is $1500. The annual cost of capital for Pass TheHoney is 15%. (i) For the store in San Diego, what is the optimal order size for each order? What is the annual shipping cost for the San Diego store? (5 points) (ii) Now, Pass TheHoney integrates two stores into one and places orders for the integrated store. What is the optimal order size for the integrated store? What is the annual inventory holding cost for the integrated store? (5 points) (iii) What is the average ow time of honeycombs in the San Diego store in part (1)? What is the average flow time of honeycombs in the integrated store in part (ii)? Which one moves honeycombs through the store faster? (5 points)
Step by Step Solution
★★★★★
3.43 Rating (172 Votes )
There are 3 Steps involved in it
Step: 1
PassTheHoney Inventory Optimization Part i San Diego Store 1 Optimal Order Quantity EOQ Weekly deman...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started