Al Fardan Company is specialized in mangoes distribution in the city of Muscat. Sales are 500 boxes (unit) per month (four weeks). It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities from 1 to 199 at a unit price RO 5, quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best decision that minimizes the total annual inventory cost is Select one: a. 200 units, Total cost =27,240 b. 500 units, Total cost = 24,995 c. 450 units, Total cost = 23,500 d. 185 units, Total cost = 30,649

Al Fardan Company is specialized in mangoes distribution in the city of Muscat. Sales are 500 boxes (unit) per month (four weeks). It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities from 1 to 199 at a unit price RO 5, quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best decision that minimizes the total annual inventory cost is Select one: a. 200 units, Total cost =27,240 b. 500 units, Total cost = 24,995 c. 450 units, Total cost = 23,500 d. 185 units, Total cost = 30,649

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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