13.20. Southwood Furniture Company is a U.S.-based furnituremanufacturer that offshored all of its actual manufacturing opera-tions to China about a decade ago. It set up a distribution center inHong Kong from which the company ships its items to the UnitedStates on container ships. The company learned early on that it couldnot rely on local Chinese freight forwarders to arrange for sufficientcontainers for the company's shipments, so it contracted to purchasecontainers from a Taiwanese manufacturer and then sell them toshipping companies at the U.S. ports the containers are shipped to.Southwood needs 715 containers each year. It costs $1200 to holda container at its distribution center, and it costs $6000 to receivean order for the containers. Determine the optimal order size, min-imum total annual inventory cost, number of annual orders, andtime between orders.

Given: Annual Demand (D)= 715 Holding cost (H) =$1200 Ordering cost (S) =$6000

Answered: 13.20. Southwood Furniture Company is a…

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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