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(Solved): Question 3 (16 Points) Best Buy Sells Two Models Of Computers, A, And B. Annual Demands For Model A....


Question 3 (16 points) Best Buy sells two models of computers, A, and B. Annual demands for model A. and Bare 12000, and 200

produced the better forecast over the we Question 3 (16 points) Best Buy sells two models of computers, A. and B. Annual dema

Question 3 (16 points) Best Buy sells two models of computers, A, and B. Annual demands for model A. and Bare 12000, and 200 respectively. Each model costs Best Buy S500. There is a fixed transportation cost 54,000 each time an order is delivered. For each model ordered and delivered on the same truck an additional fixed cost is respectively $1,000, and $800 for model A, and B. Dell incurs an annual holding cost of 20% a) What is the optimal order quantity of each model if the manager order independently? b) What is the optimal order quantity of each model if the manager order uses tailored aggregation (selective about which models they include in each order)? c) What is the average flow time at Best Buy for each model of computers under policy b). produced the better forecast over the we Question 3 (16 points) Best Buy sells two models of computers, A. and B. Annual demands for model A and B are 12000, and 200 respectively. Each model costs Best Buy $500. There is a fixed transportation cost $4,000 each time an order is delivered. For each model ordered and delivered on the same truck an additional fixed cost is respectively $1,000, and 5800 for model A, and B. Dell incurs an annual holding cost of 20% a) What is the optimal order quantity of each model if the manager order independently? b) What is the optimal order quantity of each model it the manager order uses tailored aggregation (selective about which madels eley include in ech onder)? c) What is the average flow line at Best Buy for each anodel of computers under policy by


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(a) Independent ordering Common Fixed cost (S) = $4,000 Item (j) Demand (Dj) Unit cost (Cj) Unit carrying cost (Hj = 20% * Cj) Individual ordering cost (Sj) EOQ Qj = (2.Dj.(S+Sj) / Hj)1/2 1
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