P8 Question 8A company makes beaded necklaces and spends $75,000 per year to hold beads in inventory and$55,000 per year to order the beads from the supplier. The beads fit the requirements for theeconomic order quantity inventory model. What can you say about the way this company ismanaging the inventory of beads? (Slide 22)O The company should increase the number of beads it orders per yearO The company should decrease the number of beads it orders per yearThe company should decrease its order size to decrease its holding costO The company is ordering the economic order quantityO The company should increase its order size to decrease its ordering cost

Economic order quantity = sqrt(2DS/H) where, D = Annual demand S = ordering cost H = Holding…

Answered: A company makes beaded necklaces and…

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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Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually. Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually.

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