Marly Bird Cosmetics Company allows independent sales consultants to sell cosmetics to their own clients via a network-and-sell scheme. They manufacture their own lipsticks and supply them to the Sales Consultants in their network. They need to identify what the optimal production lot size would be and how often to run their production cycle. They provide you with the following information so that you can help them by identifying the Optimal Inventory Policy for lipsticks in terms of the production lot size, total annual cost, average inventory level and reorder points along with the number of production runs per year and the cycle time in days.
-The annual production capacity of the facility is 300,000 units of lipsticks.
-The annual demand is estimated at 250,000 lipsticks with the demand rate expected to be constant throughout the year.
-The cost of setting up the production line is expected to be around $1000 for raw materials and production requires a lead time of 10 days.
-The manufacturing cost per lipstick is $15.00, which includes the wages, shipping costs, and the costs of raw materials.
-The annual holding cost is figured at a 20% rate.
-The number of working days per year are 250.
Marly Bird Cosmetics Company allows independent sales consultants ……
Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7,600 coples. The cost of one copy of the book is $11.50. The holding cost is based on an 18% annual rate, and production setup costs are $150 per setup. The equipment with which the book is produced has an annual production volume of 25,000 copies. Wilson has 250 working days per year, and the...
Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 6,800 copies. The cost of one copy of the book is $14. The holding cost is based on an 21% annual rate, and production setup costs are $155 per setup. The equipment on which the book is produced has an annual production volume of 22,500 copies. Wilson has 250 working days per year, and the lead...
For Practice Only Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7,400 copies. The cost of one copy of the book is $14.5. The holding cost is based on an 17% annual rate, and production setup costs are $145 per setup. The equipment on which the book is produced has an annual production volume of 24,000 copies. Wilson has 250 working days per year,...
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