# Bus adm 370 introduction to supply chain management: homework 3

Bus Adm 370   Introduction to Supply Chain Management:
Homework 3 (50 points):

For all the problems, you have to show your complete and accurate work to receive full scores. If
you will not be assigned a full score (or if your answer is wrong, you will miss the opportunity of
receiving any partial credit).

Problem 1:  (16 points)
A produce distributor uses 1,200 packing crates a month, and each crate is purchased at a cost of \$16. The manager
has assigned an annual carrying cost of 20 percent of the purchase price per crate. Ordering costs are \$40. Currently
the manager orders once a month.
a) What is the Economic Order Quantity (EOQ) for this product? (4 pts)
b) How much could the firm save annually in total holding and ordering costs by ordering at the EOQ level? (8 pts)
(Show the computations for the ordering, carrying and total holding and ordering costs in detail)
c) What would the net change (with its direction) in the ordering cost be by ordering at the EOQ level? (2 pt)
d) What would the net change (with its direction) in the carrying cost be by ordering at the EOQ level? (2 pt)

Problem 2:  (18 points)
A manager has just received a revised price schedule from a vendor. What order quantity should the
manager use in order to minimize total costs? Annual Demand is 120 units, ordering cost is \$8, and annual
carrying cost is \$1 per unit.

Problem 3:  (16 points)
Milk is stocked at the grocery store each week. At the end of the week unsold milk is reduced in price by
70% and always sells for this lower price instantly. If weekly demand for milk is normally distributed
with a mean of 200 gallons and standard deviation of 25 gallons, find the price for which a fresh gallon of
milk sells. Assume a service level of 95% and that the store purchases milk for \$2 per gallon.

Bonus Problem:  (6 points) (Bonus points will be added to your homework score).
A newspaper boy is trying to perfect his business in order to maximize the money he can save for a new
car. Daily paper sales are normally distributed, with a mean of 100 and standard deviation of 10. He sells
papers for \$0.50 and pays \$0.30 for them. Unsold papers are trashed with no salvage value. How many
papers should he order each day and what % of the time will he experience a stockout? Are there any
drawbacks to the order size proposed and how could the boy address such issues?

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Sociology
Really beautiful, beautiful work here. Well done! I love this service so much!
Customer 454259, April 11th, 2020
Education
Good work.
Customer 453707, March 27th, 2022
Education
well done
Customer 463813, April 19th, 2023
MGMT 221 Introduction to Management Information System
Great job!
Customer 457731, February 25th, 2022
Other
Thank you so much the paper was great and right on time!
Customer 462623, April 3rd, 2023
Environmental studies and Forestry
Good work.
Customer 458115, June 6th, 2022
Thank you for the corrections. This is what I expected my paper to be.
Customer 460555, November 22nd, 2021
SEO
good
Customer 463813, March 8th, 2023
Nursing
i really appreciate for the writer work for redoing my assignment on my request. Hopefully i will get atleast credit in this essay.
Customer 452967, April 3rd, 2020
I had to make some updates but overall the paper was great. Will need to use this writer again for the next part.
Customer 453721, October 29th, 2022
English 101
Excellent deliverables. I love the immersive thought.
Customer 462537, April 21st, 2022
Nice article. I've also learnt alot.
Customer 453915, September 21st, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend