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Please solve this M/s Drink n Njoy is situated at the prime location of the city, and tries to use optimally the shelf space needed
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M/s Drink n Njoy is situated at the prime location of the city, and tries to use optimally the shelf space needed to display items since there is no stock / store room in the back of the store. One popular item, a 250ml can of dehydrated water, takes up 24 square inches of shelf space. The shelf space available for this item measures six feet by four feet. The store manager would like to order a quantity that can fill the shelf space without stacking one over the other and without needing to store cans elsewhere in MBA BM 19-21 SCM SEC 4 ET Page 4 of 6 the store. The amount ordered should all be on display once M/s Drink n Njoy runs out and ideally would arrive just as the last can is purchased. a) Suppose the annual demand is 10,000 units and the cost per can is Rs 200 with a holding cost of 10%. What is the required order cost per lot? b) Extreme heat conditions spike demand during the summer to an annualized rate of 25,000 cans per year and the price rises to Rs 300 per can with a holding cost of 20%. What is the required order cost per lot? c) Extreme heat conditions spike demand during the summer to an annualized rate of 30,000 cans per year and the price rises to Rs 400 per can. If the ordering cost per lot is Rs 35 , what is the holding cost percentageStep by Step Solution
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