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Q2: Amazon sells 20,000 units of consumer electronics from Samsung every month. Each unit costs $100 and Amazon has an annual holding cost of
Q2: Amazon sells 20,000 units of consumer electronics from Samsung every month. Each unit costs $100 and Amazon has an annual holding cost of (20+Your Course ID) percent. The fixed clerical and transportation cost for each order Amazon places is $4,000. On the other hand, to fulfill every order, Samsung incurrs a fixed cost of $2,000, and the unit production cost for Samsung is $50. Samsung has a holding cost of 30%. Your Course ID= 22 1. What is the optimal size of the order that Amazon should place with Samsung? What is the total inventory holding and ordeirng cost for Amazon? Annual demand D= Unit cost Cr= 240000 100 Ordering cost Sr= 4000 Holding cost*%= 42% Unit holding cost Hr= 42 Optimal EOQ= 6761.234 Annual ordering cost= 141985.9 Annual holding cost Total annual cost- 141985.9 283971.8 (only include inventory holding cost and ordering cost) 2. With the optimal order size placed by Amazon, what is the total inventory holding and ordeirng cost for Samsung? What is the total supply chain cost? Annual demand D= Optimal order size= 240000 6761.234 Ordering cost Sm= 2000 Holding cost *= 30% Unit holding cost Hm= 600 Annual ordering cost- 70992.96 Annual holding cost- Total annual cost= Total supply chain cost- 2028370 2099363 (only include inventory holding cost and ordering cost) 3. In order to minimize the total supply chain cost for handling this product, What is the optimal ordering quantity (EOQ)? What is the total inventory holding and ordeirng cost for Samsung (based on the new EOQ)? Annual demand D= Supply chain ordering cost S= Supply chain holding cost H= EOQ= Annual SC holding cost- Annual SC ordering cost- Annual SC cost= Samsung annual holding cost= Samsung annual ordering cost= 240000 (only include inventory holding cost and ordering cost)
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