Question

The raw chicken supplier offered price discount to $5 per kg if quantity purchase is above 1,500 kg. Otherwise the price is $7 per kg. Cost per order is $30 per order. The average holding cost for the chicken for the buyer is about 12% per year.

Compute the optimal reorder quantity (raw chicken) for the chicken rice seller if the forecasted annual demand for raw chicken is 20,000 kg per year.

Note: TC = (C x D) + (S x D) / Q + (h x C x Q)/2

Answer 1

Giventhat Amswer- Cost Per K c) $ 7 Lot Size if 00above ei Lot Si ze 20 Pes order (lo)= ercdesing hateting Cost 12/o 03C Cn)= Cost yeaY annual Demand (D)20,000 than Isoto, lot Siza geater usef Star ting we EOQ 2X DX Co Qx 20,000 X 20 21414 2 Ch Oc12 X 5 Eo&=141 4 2 which u los han s00 So, th a feasible Solution mot For Lot Size between to 1s00 So, 2x DX axa0, 000x 30 I195.228 Cn O I2X7 E0 LA Les thoun isoo 11 9528 So, thiy is a feasi ble Solution for So,ADptimal orde uuty TC Should Ea be munimum = 119S 98 EOG 1195.28 127 So, Total Cast at Dxc)+ Co) + xCn 0,000x74 d0,0020t 1195 28 2 joc TC 141003.992 dollar Te (at iso 20 000x 5+ dbo0x 20+500, 12 x5=l00850 dollar

is minimum Total los t at 1500 bretuteon bet So, timal rder quautity is 1500 Ans