Question details

MarketReach is continuously training new hires
$ 15.00

 

MarketReach has approximately 300 employees, but loses about three per day. MarketReach is continuously training new hires. Each new hire receives a set of training materials valued at approximately $35. History has shown that the demand for the training materials meets the assumptions of the economic order quantity, and management has decided that they should use that approach to determine order quantities.

 

****Must use Management Scientist program to answer the questions and please provide output files or screenshots from Management Scientist.

 

1.) Demand for the training material packets is projected at 900 per year. Order cost is $20 and inventory carrying costs are $10 per packet per year. Make sure that the startup defaults on the Economic Order Quantity interactive model match these parameters.

a.) What is the economic order quantity at these parameter settings? Compute the total carrying cost and total order cost at these settings.

b.) From the shape of the total cost curve, do you think rounding the order quantity will have    much of an impact on the total cost? Explain your answer.

 

****Must use Management Scientist program to answer the questions and please provide output files or screenshots from Management Scientist.

 

2.) MarketReach is negotiating with a different supplier of training materials. It appears that through that supplier the packets will be significantly cheaper, reducing the carrying costs. Set the parameters of the model to these values:

                a.) What is the economic order quantity at these parameters:

Carrying Cost(H): $6

Demand:               900

Order Cost (S):   $20

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