Question II

Question II The PriceRite big box discount center orders printer cartriges from a manufacturer in the Far East.  PriceRite annual demand for the printer cartridges is 6000 units.  Assume that demand is steady, and the lead time is zero.  The fixed cost per order is $200, while the inventory carrying cost is 25%.  The wholesale price is $45 per unit.  The supply firm has just offered PriceRite a quantity discount contract:  if they place an order of at least 2000 units, the price will be $44 per unit.  Build a spreadsheet model to evaluate the quantity discount offer. Input Description    Symbol    Value    Metric Annual demand    D         cases Regular price    V         /case Discount price    V_         /case Minimum order quantity    MOQ         cases/order Ordering cost    A         /order Carrying cost factor    H         /case/yr Result Description    Symbol    Regular    Symbol    Discount Economic order quantity    EOQ        EOQ_ Actual order quantity    AOQ        AOQ_ Number of order per year    N        N_ Cycle stock    CS        CS_ Annual ordering cost    OC        OC_ Annual carrying cost    CC        CC_ Annual purchase cost    PC        PC_ Total relevant cost    TRC        TRC_ Savings from discount            SAV Question III Penny Smith, a logistics analyst at 3W Company, would like to develop a convenient and accurate method of examining LTL shipment rates from Seattle to Atlanta. Penny queried the 3W Company database for the shipment rates. The results of the query are shown in the Shipment Rate Table. Complete the following spreadsheet model for Penny. 1. Decision Variable                    2. Shipment Rate Table Description    Symbol    Value    Metric        Break (lb)    MW (lb)    Rate ($/lb) Shipment Weight     SW    45     lb        0    1     $330.10 5     $259.93 3. Results                        10     $217.28 Description    Symbol    Value    Metric            20     $185.23 Minimum weight    MW        lb per shipment            50     $161.39 Billed weight    BW        lb per shipment            100     $134.16 Freight rate    F        per lb            200     $126.52 Shipment cost    SC        per shipment Effective Rate    ER        $/lb Question V Winter Gear, a manufacturer of high-end snowboarding and skiing equipment in Boulder Colorado, must decide how many units of its new snowboard, the Daredevil 5000X to put in production for the upcoming season.  Based on historical demand, management forecasts that demand will be normally distributed with a mean of 5000 and a standard deviation of 750.  Winter Gear’s production cost per unit is $500, and they sell the snowboards for a retail price of $999.  If any snowboards are left over in March, they can be sold on eBay for $250 each.  If the retailer were to run out of boards, management estimates that the cost of lost goodwill is $400. Build a spreadsheet model to determine how many units of the Daredevil 5000X snowboard Winter Gear should put in production. Inputs    Symbol    Amount    Measure        Work Area    Symbol    Amount    Measure Demand Parameters                    Cost of underage    CU Mean of Demand    UD        units        Cost of Overage    CO Standard Deviation of Demand    SD        units        Critical Ratio    CR Price and Cost Parameters Unit retail selling price    P         /unit End-of-season salvage price    V         /unit        Results    Symbol        Measure Unit cost    C_         /unit        Order Quantity    Qstar        units Goodwill cost    G         /unit        Probability of stockout    POS