Mgt613 GDB solution
Saturday, January 22, 2011 Posted In MGT Edit ThisABC Company deals in manufacturing Air Conditioners.
For manufacturing purpose the company uses 824 compressors annually.
Ordering costs are $14, carrying costs are $6 per compressor a year.
According to price schedule orders less than 50 compressors will cost $15 per compressor, 50 to 79 compressors will cost $13 per compressor, 80 to 99 compressors will cost $11 per compressor and lager orders will cost $10 per compressor.
Determine the optimal order quantity and describe in which price range it will fall. Based on that price range also determine the total cost.
..................
Soluiton:
The maintenance department of a large cardiology hospital in Islamabad uses about 1200
cases of corrosion removal liquid, used for maintenance of hospital. Ordering costs are Rs 100, carrying cost are Rs 20 per case, and the new price schedule indicates that orders of less than 50 cases will cost Rs 1250 per case, 50 to 79 cases will cost Rs 1150 per case, 80 to 99 cases will cost Rs 1050 per case and larger costs will be Rs 1000 per case.
Determine the Optimal Order Quantity and the Total Cost.
Given Data
D=1200 case.
S= Rs. 100 per case
H=Rs.20 per case
Range Price
1 to 49 Rs 1250
50 to 79 Rs 1150
80 to 99 Rs 1050
100 or more Rs 1000
Annual
carrying
cost
Purchasing
TC = + cost
Q
2
H D
Q
TC = + S
+
Annual
ordering
cost
+ PD
C
O
S
T
EOQ
TC with PD
TC without PD
PD
0 Quantity
Adding Purchasing cost
doesn’t change EOQ
5
Compute the Common EOQ=Sq Root (2DS/H)
= Sq Root (2 X 100 X 1200/20)
=Sq Root (12000)
=109.5=110 cases which would be brought at 1000 per order
The total Cost to Purchase 1200 cases per year would be
TC= Carrying Cost+ Order Cost+ Purchase Cost
=(Q/2)H+(D/Q0)S+PD
=(110/2)20+(1200/110)100+1200X 1000
=1100+1091+12000,000
=Rs. 1,202,191
.....................
Given Data
D=824 compressor.
S= Rs. 14 per compressor
H=Rs.6 per compressor
Range Price Price
1 to 49 Rs 15
50 to 79 Rs 13
80 to 99 Rs 11
100 or more Rs 10
Compute the Common EOQ=Sq Root (2DS/H)
Sq Root (2 X 14X 824/6)
Sq Root of 3845.333333
62.01075176
62.01075176 compressor which would be brought at 1000 per order
The total Cost to Purchase 824 compressor per year would be
TC= Carrying Cost+ Order Cost+ Purchase Cost
=(Q/2)H+(D/Q0)S+PD
(62.01075176/2)6+(824/62.01075176)14+824*10
8612.064511
.................
..................
Soluiton:
The maintenance department of a large cardiology hospital in Islamabad uses about 1200
cases of corrosion removal liquid, used for maintenance of hospital. Ordering costs are Rs 100, carrying cost are Rs 20 per case, and the new price schedule indicates that orders of less than 50 cases will cost Rs 1250 per case, 50 to 79 cases will cost Rs 1150 per case, 80 to 99 cases will cost Rs 1050 per case and larger costs will be Rs 1000 per case.
Determine the Optimal Order Quantity and the Total Cost.
Given Data
D=1200 case.
S= Rs. 100 per case
H=Rs.20 per case
Range Price
1 to 49 Rs 1250
50 to 79 Rs 1150
80 to 99 Rs 1050
100 or more Rs 1000
Annual
carrying
cost
Purchasing
TC = + cost
Q
2
H D
Q
TC = + S
+
Annual
ordering
cost
+ PD
C
O
S
T
EOQ
TC with PD
TC without PD
PD
0 Quantity
Adding Purchasing cost
doesn’t change EOQ
5
Compute the Common EOQ=Sq Root (2DS/H)
= Sq Root (2 X 100 X 1200/20)
=Sq Root (12000)
=109.5=110 cases which would be brought at 1000 per order
The total Cost to Purchase 1200 cases per year would be
TC= Carrying Cost+ Order Cost+ Purchase Cost
=(Q/2)H+(D/Q0)S+PD
=(110/2)20+(1200/110)100+1200X 1000
=1100+1091+12000,000
=Rs. 1,202,191
.....................
Given Data
D=824 compressor.
S= Rs. 14 per compressor
H=Rs.6 per compressor
Range Price Price
1 to 49 Rs 15
50 to 79 Rs 13
80 to 99 Rs 11
100 or more Rs 10
Compute the Common EOQ=Sq Root (2DS/H)
Sq Root (2 X 14X 824/6)
Sq Root of 3845.333333
62.01075176
62.01075176 compressor which would be brought at 1000 per order
The total Cost to Purchase 824 compressor per year would be
TC= Carrying Cost+ Order Cost+ Purchase Cost
=(Q/2)H+(D/Q0)S+PD
(62.01075176/2)6+(824/62.01075176)14+824*10
8612.064511
.................
