Weedandfeed Corporation retails chemicals for homes. One of Weedandfeed's best selling pesticides is Pest-be-gone. The
Posted: Sun Jun 05, 2022 7:06 pm
Weedandfeed Corporation retails chemicals for homes. One
of Weedandfeed's best selling pesticides is Pest-be-gone. The
product is ordered from a wholesaler at a price of $600 per 100
pounds. 100,000 pounds of Pest-be-gone are estimated to be
needed next year. Weedandfeed will use one of the following
purchasing options for acquiring its product.
a) Based on this information and wanting to use the low
cost strategy, what is the optimal order quantity that Weedandfeed
should select for acquiring its Pest-be-gone next year? Also, what
is the lowest total cost for each of the two purchase
options?
b) For the optimal order quantity selected in a) that
provides the lowest total cost, determine the number of orders per
year, time between orders, and the reorder point. There are
350 working days per year and the lead time is 5 days.
of Weedandfeed's best selling pesticides is Pest-be-gone. The
product is ordered from a wholesaler at a price of $600 per 100
pounds. 100,000 pounds of Pest-be-gone are estimated to be
needed next year. Weedandfeed will use one of the following
purchasing options for acquiring its product.
a) Based on this information and wanting to use the low
cost strategy, what is the optimal order quantity that Weedandfeed
should select for acquiring its Pest-be-gone next year? Also, what
is the lowest total cost for each of the two purchase
options?
b) For the optimal order quantity selected in a) that
provides the lowest total cost, determine the number of orders per
year, time between orders, and the reorder point. There are
350 working days per year and the lead time is 5 days.