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QUESTION

1. Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington. It sells 5,000 White Marine WM-4 diesel engines every year.These engines are shipped to Douglas in a shippi

1. Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington. It sells 5,000 White Marine WM-4 diesel engines every year.These engines are shipped to Douglas in a shipping container of 100 cubic feet, and Douglas Boats keeps the warehouse full of these WM-4 motors.The warehouse can hold 5,000 cubic feet of boating supplies. Douglas estimates that the ordering cost is $10 per order, and the carrying cost is estimated to be $10 per motor per year. Douglas Boats is considering the possibility of expanding the warehouse for the WM-4 motors. How much should Douglas Boats expand, and how much would it be worth for the company to make the expansion? Assume demand is constant throughout the year.

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* Douglas ***** ** a supplier ** boating ********* *** *** ****** ** ****** *** Washington It sells 5000 ***** ****** WM-4 diesel ******* ***** ********* ******* *** ******* to ******* ** * ******** container ** *** ***** feet *** ******* ***** keeps *** ********* full ** these WM-4 motorsThe ********* *** **** **** cubic feet ** ******* supplies Douglas ********* that *** ******** cost ** *** *** ***** *** *** ******** **** ** ********* ** ** *** per ***** *** **** ******* Boats is *********** *** *********** ** ********* *** ********* for *** **** ****** *** **** ****** ******* ***** ****** *** how **** ***** ** be ***** *** *** company ** make *** ********** Assume demand is ******** throughout *** ****************** ***** costs the optimal EOQ ** *** ****** ** ******* the warehouse has 5000/100 = ** ****** **** ****** ****** ** ***** cubic **** ********** ******** *** *** ****** ****** **** of *** ********* ** $42500 Annual **** ** *** ******** ********* = $20000 ***** *** ******* ***** **** * $42500 * $20000 = $22500 *** cost ******* ***** ** ******** ** the **** ** *********

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