Scribd Logo
Upload

Welcome to Scribd!

  • Assignments

    Uploaded by

    Wena Marie B. DAGONDON
    174 views1 page
    The purchasing agent is considering three suppliers for oak barrels. Supplier 1 offers barrels for $125 each, supplier 2 offers barrels in lots of 80 or more for $120 each, and supplier 3 offers barrels in lots of 150 or more for $118 each. The distillery uses 1,500 barrels per year. The agent needs to determine the supplier with the lowest total annual cost considering purchase price, carrying costs of 20%, and a $75 ordering cost. The Mindanao Agrivet Supplies experiences a normal distribution for reorder amounts of grower feeds, with a mean of 250 bags and standard deviation of 50 bags. Part a asks for the stockout percentage with a safety stock of 64 bags, and part

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The purchasing agent is considering three suppliers for oak barrels. Supplier 1 offers barrels for $125 each, supplier 2 offers barrels in lots of 80 or more for $120 each, and supplier 3 offers barrels in lots of 150 or more for $118 each. The distillery uses 1,500 barrels per year. The agent needs to determine the supplier with the lowest total annual cost considering purchase price, carrying costs of 20%, and a $75 ordering cost. The Mindanao Agrivet Supplies experiences a normal distribution for reorder amounts of grower feeds, with a mean of 250 bags and standard deviation of 50 bags. Part a asks for the stockout percentage with a safety stock of 64 bags, and part

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    174 views1 page

    Assignments

    Uploaded by

    Wena Marie B. DAGONDON
    The purchasing agent is considering three suppliers for oak barrels. Supplier 1 offers barrels for $125 each, supplier 2 offers barrels in lots of 80 or more for $120 each, and supplier 3 offers barrels in lots of 150 or more for $118 each. The distillery uses 1,500 barrels per year. The agent needs to determine the supplier with the lowest total annual cost considering purchase price, carrying costs of 20%, and a $75 ordering cost. The Mindanao Agrivet Supplies experiences a normal distribution for reorder amounts of grower feeds, with a mean of 250 bags and standard deviation of 50 bags. Part a asks for the stockout percentage with a safety stock of 64 bags, and part

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    1.

    The purchasing agent for Jack Spaniel Distillery is considering three sources of supply
    for oak barrels in which the distillery’s fine sour-mash bourbon is aged. The first supplier
    offers any quantity of barrels at $125 each. The second supplier offers barrels in lots of 80
    or more at $120. The third supplier offers barrels in lots of 150 or more at $118 each. The
    distillery uses 1,500 barrels a year at constant rate. Carrying costs are 20 percent and it
    costs the purchasing agent $75 to place an order. From which source should the distillery
    buy its barrels? What will be the total annual cost of buying the barrels, carrying inventory
    and performing the necessary purchasing operations?

    2. The Mindanao Agrivet Supplies has experienced a mean use of 250 bags of Grower
    Feeds during past reorder periods, with a standard deviation of 50 bags. Assuming a normal
    distribution of lead time demand

    a. What percentage of the time will stockouts be experienced with a safety stock
    level of 64 bags?

    b. What safety stock have to be utilized in order to maintain a 95 percent service


    level?

    You might also like