please answer all parts of question number 13 and please type up asnwer 13. Wang
ID: 329819 • Letter: P
Question
please answer all parts of question number 13 and please type up asnwer
13.
Wang Distributors has an annual demand for an airport metal detector of
1380units. The cost of a typical detector to Wang is
$400.
Carrying cost is estimated to be
21 %
of the unit cost, and the ordering cost is
$24
per order. If Ping Wang, the owner, orders in quantities of
300
or more, he can get a
5 %
discount on the cost of the detectors. Should Wang take the quantity discount?
What is the EOQ without the discount?
EOQ =
nothing
units (round your response to one decimal place).Since the total cost with the discount is
(1)
the total cost without the discount, Wang
(2)
order 300 units at a time in order to qualify for the discount.(1)
less than
greater than
13. Wang Distributors has an annual demand for an airport metal detector of 1,380 units. The cost of a typical detector to Wang is $400. Carrying cost is estimated to be 21% of the unit cost, and the ordering cost is $24 per order. If Ping Wang, the owner, orders in quantities of 300 or more, he can get a 5% discount on the cost of the detectors. Should Wang take the quantity discount? What is the EOQ without the discount? EOQ= units (round your response to one decimal place). Since the total cost with the discount is (1) - - the total cost without the discount, Wang (2) – order 300 units at a time in order to qualify for the discount. (2) O (1) O O less than greater than should should not 14. M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 675 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is $50, and annual holding cost per unit is $5. Allen Mfg. Quantity Unit Price 1-499 $16.00 500-999 15.50 1000+ 15.00 Baker Mfg. Quantity Unit Price 1-399 $16.10 400-799 15.60 800+ 15.10 a) What is the economic order quantity if price is not a consideration? 402 units (round your response to the nearest whole number). b) Which supplier, based on all options with regard to discounts, should be used? Allen Mfg.Explanation / Answer
Annual demand D = 1380 units
Purchase cost C = 400 $
Carrying cost H = 0.21*400 = 84 $
Ordering cost S = 24 $ per order
EOQ without discount = SQRT(2*D*S/H) = SQRT(2*1380*24/84) = 28 units
Total cost at EOQ = (D/Q)*S+(Q/2)*H+C*D = (1380/28)*24+(28/2)*84+400*1380 = 554360 $
Total cost if quantity >=300 = (1380/300)*24+(300/2)*84+0.95*400*1380 = 537110 $
Since the total cost with discount is 1) greater than the total cost without discount, Wnag 2) should not order 300 units at a time in order to qualify for the discount.
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