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    Supersonic Company spends P9000,000 per year on an ingredient for its assembly department. The purchasing manager estimates an ordering cost of P600 and annual storage cost of 22%. To minimize total costs, the optimal number of orders per year is 1, with a days supply per order of 285 days and optimal peso per order of P7,006.

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    Management science activity 2

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    Supersonic Company spends P9000,000 per year on an ingredient for its assembly department. The purchasing manager estimates an ordering cost of P600 and annual storage cost of 22%. To minimize total costs, the optimal number of orders per year is 1, with a days supply per order of 285 days and optimal peso per order of P7,006.

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    19 views1 page

    Activity 2

    Uploaded by

    Desiree
    Supersonic Company spends P9000,000 per year on an ingredient for its assembly department. The purchasing manager estimates an ordering cost of P600 and annual storage cost of 22%. To minimize total costs, the optimal number of orders per year is 1, with a days supply per order of 285 days and optimal peso per order of P7,006.

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    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    2. Supersonic Company uses P 9000,000 annually of a particular ingredient in its assembly department.

    The purchasing manager estimates the ordering cost at P600 and the annual storage cost of 22%.
    a. Determine the optimal number of orders per year.
    AC 9000(.22) 1980
    N₀=
    √ √
    2P
    =
    2( 600)
    =
    1200√= √1.65= 1 order per year
    b. Determine the number of days’ supply per order.
    2P 2( 600) 1200

    c.
    Nḍ=365
    √ √AC
    =
    √
    9000(.22) 1980
    =365 √ 0.61= 285 days supply

    Determine the optimal number of peso per order.


    2 AP 2( 9000)(600) 10,800,000
    Np=
    √ √
    C
    =
    .22
    =
    .22 √ =√ 49,090,909 = 7,006 per order

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