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QUESTION 3 a) Bernard's, distributor of three models of widgets, (A,B,C) has decided to aggregate and order all three models each time they place
QUESTION 3 a) Bernard's, distributor of three models of widgets, (A,B,C) has decided to aggregate and order all three models each time they place an order (ordered and delivered jointly). The annual demand for the three products are 15000, 1500, and 150 units respectively. Each model costs the wholesaler four hundred dollars ($400). A fixed transportation cost of $3000 is incurred each time an order is delivered. For each model ordered and delivered, an additional fixed cost of $8000 is incurred for receiving and storage. Mr Bernard incurs a holding cost of 20 per cent. Determine the following: I i combined order cost per order (3marks) optimal order frequency (3 marks) iii annual order cost (3 marks) iv total annual cost across all three models (4 marks)
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