Question
Solve in excel Bell computers purchases IC chips from a supplier at $350/chip. The holding cost has been estimated to be 10% of purchase price.
Solve in excel
Bell computers purchases IC chips from a supplier at $350/chip. The holding cost has been estimated to be 10% of purchase price. It has estimated that Bell will need 4800 chips per year. Bell operates 250 day per year. The company wants to maintain a service level of 95%.
Data from supplier:
The cost of placing an order is $120/order. The supplier promises an average lead time of ten days with a standard deviation of 2.5 days. Based on past Bell has estimated that daily demand during lead time is normally distributed with a mean of 19.2 and a standard deviation of 4.5. The supplier has promised the following discount schedule if Bell orders larger quantities:
Vendor 1 | |
Quantity | Discount |
1-599 | 0% |
600-1199 | 1% |
1200+ | 2.5% |
- What is the order quantity?
- What is the safety stock?
- What is the reorder point?
- What is the total cost including cost of purchasing the parts?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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