BA365 Intro to Operations Management

Question:4. Burgerama Requires all employees who handle food to wear latex gloves for sanitary reasons. The annual demand for the gloves is 250 boxes of 200 per year. The carrying cost is 25 percent per box per year of the purchase cost of $20 per Box. a. How many boxes of gloves should Burgerama order at a time? b. What is the time between orders? c. What would be the change in annual cost if Burgerama had storage space for only 15 boxes per order and thus was forced to use an order of 15?

5. Office Express sells office suppliers to businesses on a membership basis–i.e., walk-in customers without a membership are not allowed. The company delivers supplies directly to the purchaser as long as minimum purchase of $100 is made. In order to encourage bulk orders, Office Express offers the following discount schedule on purchase quantities of boxes of paper. Larry’s lumber has an annual demand of 5,000 boxes of paper, a setup cost of $10 per order, and a holding cost of 22 percent of the purchase price. Calculate the optimal order quantity. 1-100 boxes $5 per box 100-249 boxes $4.75 per box 250-499 boxes $4.50 per box 500 or more $4.25 per box

6. A watch repair shop buys batteries for a variety of products. The most frequent battery purchase is for a Y300, with demand of 3,00 per year. the order cost is $15 per order, and the holding cost is $0.50 per battery. Given the following price schedule, calculate the optimal order. Number of Batteries Price 1-250 $6.00 250-499 $5.50 500-999 $5.00 1,000 or more $4.75

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