Needing the correct answer to part E. Millennium Liquors is a wholesaler of spar

Question

Needing the correct answer to part E.

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 $110, there is a $250 fixed cost for each order (independent of the quantity ordered) and their annual holding cost is 25 percent. a.costs? What order quantity minimizes Millennium's annual ordering and holding 194 cases If Millennium chooses to order 250 cases each time, what is the sum of their annual ordering and holding costs? $5,518 b. (Round your answer to 2 decimal places.) If Millennium chooses to order 75 cases each time, what is the sum of the ordering and holding costs incurred by each case sold? $ 3.83 pe C. case If Millennium is restricted to order in multiples of 50 cases (e.g., 50, 100, 150, etc.) how many cases should they order to minimize their annual ordering and holding costs? d. 200cases Millennium is offered a 5.00% discount if they purchase at least 1,000 cases. If they decide to take advantage of this discount, what is the sum of their annual ordering and holding costs? e.

Explanation / Answer

Now if a discount of 5% on above of 1000 cases

Then

The total cost is better, as shown below:

Hence the ans:

d Demand 40 D Demand Total 2080 units per Week p Purchase cost 110 $ per unit K Ordering cost 250 $ per order h Holding cost 27.5 $ per unit per year Working days 52 week Q Order quantity 250 units R So reorder point 0 AI Average inventory 125 Units Q/2 (AI*h) Holding cost 3437.5 $ EOQ (Sqrt(2*k*D/h) 194.469 194 units AI Average inventory 97 units EOQ/2 (AI*h) Holding cost 2673.948 $ (p*AI) Purchasing cost for 410 items 10695.79 $ No of orders 10.69579 times Total orders/EOQ Toc Total ordering cost annualy 2673.948 $ Thc Annual Holding cost 2673.948 $ THOC 5347.897 (Toc+Thc) Tpc Purchasing cost annual 228800 $ TC Total cost 234148 $ (Toc+Thc+Tpc) Length of order cycle 4.861724 (Total days/No of orders) 5 days

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