A purchasing agent for a particular type of silicon wafer used in the production of semiconductor...
A purchasing agent for a particular type of silicon wafer used in the production of semiconductors must decide on the ordering quantity. Answer the following questions assuming an order setup cost of $100, a monthly requirement of 1,500 wafers. Use a 20% interest rate for holding cost calculations.
a) The current supplier, Company A, charges a unit cost of $2.50 per wafer. Calculate the optimal order quantity and time between orders
b) What is the total annual cost for this optimal ordering quantity?
c)The manufacturing manager for the company has indicated that the silicon wafers can also be produced in house at a rate of 2500 wafers per month. The manager, however, indicated that each production setup would incur a cost of $75. Furthermore, due to machine specifications, the production lot would have to be 3000 wafers. What is the range of unit manufacturing cost for which the company would prefer to manufacture the wafers in-house, rather than buying it from “outside”? (
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A purchasing agent for a particular type of silicon wafer used in the production of semiconductor...
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Steps and equations used would be very helpful please !
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