Number of Gallons Ordered = 2750 Supplier Charge for each Delivery = $30 and $1
ID: 373216 • Letter: N
Question
Number of Gallons Ordered = 2750
Supplier Charge for each Delivery = $30 and $1 for each gallon
Total Charge = $30 + $2750
= $2780 (Ordering cost for one order)
Weekly Malt requirement = 200 Gallons
Therefore, yearly Malt requirement = 200*52 (Assuming a year has 52 weeks)
= 10400 Gallons
Number of orders Yearly = 10400/2750
= 3.781 Orders
One order costs $2780
Total Yearly Order Will cost = $10513.454
The holding cost is 30% of the price per gallon
Price per gallon = 10513.454/10400
= $1.011
Holding cost per gallon = {(30/100)*1.011}
= $0.303
Explanation / Answer
Joe Birra needs to purchase malt for his micro-brew production. His supplier charges $30 per delivery (no matter how much is delivered) and $1 per gallon. Joe's annual holding cost is 30% of the price per gallon. Joe uses 200 gallons of malt per week 500 gallons a. Suppose Joe orders 1000 gallons each time. What is his average inventory? (Round your answer to 2 decimal places.) Suppose Joe orders 2000 gallons each time. How many orders does he place with his supplier each year? 5.20 orders 1,442 gallons How many gallons should Joe order from his supplier with each order to minimize the sum of ordering and holding costs? (Round your answer to 3 decima Suppose Joe orders 2750 gallons each time he places an order with the supplier What is the sum of ordering and holding costs per gallon? places.) per gallon (Round your answer to 2 decimal places.) Suppose Joe orders the quantity from part (c) that minimizes the sum of the ordering and holding costs each time he places an order with the supplier. What is the annual cost of the EOQ expressed as a percentage of the annual purchase cost? 4.16 2,000 gallons If Joe's supplier only accepts orders that are an integer multiple of 1,000 gallons how much should Joe order to minimize ordering and holding costs per gallon? Joe's supplier offers a 3.00% discount if Joe is willing to purchase 8000 gallons or he were to take advantage of the discount? $ 11,291 g. more. What would Joe's total annual cost (purchasing, ordering and holding) be if
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