#13 value: 150 points PA 12-1 Millennium Liquors is a wholesaler... Millennium L

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#13

value: 150 points PA 12-1 Millennium Liquors is a wholesaler... Millennium Liquors is a wholesaler of sparkling wines. Their most popular product is the French Bete Noire which is shipped directly from France. Weekly demand is for 40 cases. Millennium purchases each case for $120, there is a $300 fixed cost for each order (independent of the quantity ordered) and their annual holding cost is 25 percent. What order quantity minimizes Millennium's annual ordering and holding a, cases If Millennium chooses to order 325 cases each time, what is the sum of their annual ordering and holding costs? b. (Round your answer to 2 decimal places.) If Millennium chooses to order 125 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? per case If Millennium is restricted to order in multiples of 50 cases (e.g., 50, 100, 150, holding costs? Millennium is offered a 5.00% discount if they purchase at least 1,000 cases. annual ordering and holding costs? d.etc.) how many cases should they order to minimize their annual ordering and cases e. If they decide to take advantage of this discount, what is the sum of their

Explanation / Answer

D.

Ans D: So , 200 cases has the least cost.

E.

Customer Large D Demand 2080 (40*52) P Cost 120 h Inv carrying cost 30 .25*120 K Ordering cost 300 Order Q= sqrt(2*KD/h) 203.96 Cases Ans A N=D/Q Trips required 10.20 DI=250/N Days of Inv 24.51 IC=Q*h/2 Holding cost 3059.41 N*K Annual Ordering Cost 3059.41 Total cost 6118.82 For Q 325 N=D/Q Trips required 6.4 DI=250/N Days of Inv 39.06 IC=Q*h/2 Holding cost 4875.00 N*K Annual Ordering Cost 1920.00 Total cost 6795.00 $ Ans B For Q 125 N=D/Q Trips required 16.64 DI=250/N Days of Inv 15.02 IC=Q*h/2 Holding cost 1875.00 N*K Annual Ordering Cost 4992.00 Total cost 6867.00 Per case 3.30 $ Ans C

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