Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answers all the questions Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $25 per delivery (no matter how much

please answers all the questions
image text in transcribed
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $25 per delivery (no matter how much is delivered) and $1.25 per gallon. Joe's annual holding cost per unit is 25 percent of the price per gallon. Joe uses 200 gallons of malt per week. a. Suppose Joe ordors 750 gallons each time. What is his average inventory (in gal)? gallons (Round your answer to 2 decimal places.) b. Suppose Joe orders 1250 gallons each time. How many orders does he place with his supplier each year? c. How many gallons should Joe order from his supplier with each order to minimize the sum of the ordering and holding costs? (Round your answer to 3 decimal places.) d. Suppose Joe orders 2500 gallons each time he places an order with the supplier. d. What is the sum of the ordering and hoiding costs per gallon? (Round your answer to 2 decimal places.) Suppose Joe orders the quantity from part (c) that minimizes the sum of the ordering and hoiding costs each time he places an order with the supplier. What is the annual cost of the EOQ expressed as a percentage of the annual purchase cost? f. If Joe's supplier only accepts orders that are an integer multiple of 1000 gallons, how much should Joe order to minimize ordering and holding costs per gallon? Joe's supplier offers a 3.00 percent discount if Joe is willing to purchase 8000 g. gallons or more. What would Joe's total annual cost (purchasing, ordering, and holding) be if he were to take advantage of the discount

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

Financial Accounting Longman Modular Texts In Business And Economics

Authors: Christopher Waterston, Anne Britton

2nd Edition

058238169X, 978-0582381698

More Books

Students also viewed these Accounting questions