(Problem 1)A manager of Drexel Clothing Company has to make a decision on shipping. There are twoshippers, A and B. Both offer a two-day rate: A for $500 and B for $525. In addition, A offers athree-day rate of $450 and a nine-day rate of $325 and B offers a four-day rate of $400 and aseven-day rate for $375. Annual holding costs are 25% of unit price. Four hundred boxes are tobe shipped, and each box has a price of $250. The shipping charges are for the entire batch of400 boxes. Which shipping alternative would you recommend? Explain.

Answered: (Problem 1) A manager of Drexel…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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The Ambrosia Bakery makes cakes for freezing and subse-quent sale. The bakery, which operates five days a week, 52 weeks a year, can produce cakes at the rate of 116 cakesper day. The bakery sets up the cake-production operationand produces until a predetermined number (Q) have beenproduced. When not producing cakes, the bakery uses itspersonnel and facilities for producing other bakery items.The setup cost for a production run of cakes is $700. Thecost of holding frozen cakes in storage is $9 per cake per year. The annual demand for frozen cakes, which is con-stant over time, is 6000 cakes. Determine the following: a. Optimal production run quantity (Q)b. Total annual inventory costsc. Optimal number of production runs per yeard. Optimal cycle time (time between run starts)e. Run length in working days
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