A food processor uses approximately 29,730 glass jars a month for its fruit juic

Question

A food processor uses approximately 29,730 glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost is 18 cents per jar, and reordering cost is $60 per order. The company operates an average of 20 days a month.

What monthly penalty is the company incurring by its present order size?(Round your intermediate order quantity to nearest whole number and final answer to 2 decimal places. Omit the "$" sign in your response.)

A food processor uses approximately 29,730 glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost is 18 cents per jar, and reordering cost is $60 per order. The company operates an average of 20 days a month.

Explanation / Answer

Q* = sqrt ((2*29900*60)/0.18) =4465

Total Cost when Q =Q*

= 29900*60/4465 + 0.5*4465 *0.18

= $803.64

Total Cost when Q =4000

= 29900*60/4000 + 0.5*4000 *0.18

=$808.5

Penalty = 808.5-803.64

=$4.86

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.