answer excercises Wisner Ch6 nr 3-4-5

answer excercises Wisner Ch6 nr 3-4-5 - 3 Perkins Rodeo...

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3. Perkin’s Rodeo Tack & Boots sells gear to rodeo industry customers and Greg, the owner, has been offered discounts for the purchase of some alligator-hide boots from his long-time boot supplier. The pricing alternatives for the alligator boots are: \$62 per pair for 1 - 99 pair purchased; \$57 per pair for 100 – 299 units purchased, and \$54 per pair for 300 or more units purchased. Perkin’s average order cost is \$25 per order, the forecasted annual demand for alligator boots is 1200 pair, and their inventory carrying cost rate is 24 percent per year. a. Calculate the EOQ for each of the three purchase prices. Which EOQs are valid? Ans.: EOQ 1 = ) 62 ( 24 . 0 ) 25 )( 1200 ( 2 = 64 pair EOQ 2 = ) 57 ( 24 . 0 ) 25 )( 1200 ( 2 = 66 pair EOQ 3 = ) 54 ( 24 . 0 ) 25 )( 1200 ( 2 = 68 pair Only EOQ 1 is a valid order quantity (both of the other quantities would result in the original \$62 per pair pricing). b.

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This note was uploaded on 05/30/2011 for the course MIM 1001 taught by Professor Fredser during the Spring '11 term at International University in Germany.

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answer excercises Wisner Ch6 nr 3-4-5 - 3 Perkins Rodeo...

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