Please Answer All 3 If Possible

A.The Uptown Kiln is an importer of ceramics from overseas. It has

arranged to purchase a particular type of ceramic pottery from a

Korean artisan. The artisan makes the pottery in 120-unit batches and

will ship only that exact amount. The transportation and handling cost

of a shipment is $7,600 (not including the unit cost). The uptown Kiln

estimates its annual demand to be 900 units. What storage and

handling cost per unit does it need to achieve in order to minimize its

inventory cost?

 

 

 

 

 

B.The I-75 Carpet Discount Store has an annual demand of 10,000 yards

of Super Shag carpet. The annual carrying cost for a yard of this

carpet is $0.75, and the ordering cost is $150. The carpet manufacturer normally charges the store $8 per yard for the carpet; however,the manufacturer has offered

a discount price of $6.50 per yard if the store will order 5,000 yards. How much should the store order, and what will be the total annual inventory cost for

that order quantity?

 

 

 

 

 

C. The bookstore at State University purchases sweatshirts emblazoned

with the school name and logo form a vendor. The vendor sells the

sweatshirts to the store for $38.00 apiece. The cost to the bookstore

for placing an order is $120.00, and the carrying cost is 25% of the price paid per shirt

 

The bookstore manager estimates that 1,700 sweatshirts will be sold

during the year. The vendor has offered the bookstore the following volume

discount schedule.

 

 

 

 

Order Size                                              Discount %

 

1-299                                     0

 

300-499                                 3

 

500-799                                 5

 

800 +                                     6

 

 

 

 

 

The bookstore manager wants to determine the bookstores’ optimal order

quantity given the foregoing quantity discount information.