# SarahAc€?cs Organic Soap (Q10 Ac€?o Q12) SarahAc€?cs Organic Soap Company makes four kinds

SarahAc€?cs Organic Soap (Q10 Ac€?o Q12)

SarahAc€?cs Organic Soap Company makes four kinds of organic liquid soap- Ac€A?regularAc€??, Ac€A?lavenderAc€??, Ac€A?citrusAc€?? and Ac€A?tea treeAc€??. Demand for the four scents are 150, 120, 75 and 50 kgs per hour respectively. SarahAc€?cs production process can produce any soap at the rate of 450 kgs per hour but 1.5 hours are needed to switch between scents. During those switchover times, the process doesnAc€?ct produce any soap. Sarah wants to choose a production schedule that (i) cycles repeatedly through the four scents, (ii) meets the required demand and (iii) minimizes the amount of inventory held.

Q10) How many kgs of Ac€A?regularAc€?? should Sarah produce before switching over to another scent?

Q11) Sarah needs to purchase organic Palm oil to make her soaps. She needs 1,000 kgs of Palm oil per day on average. The supplier charges a \$60 delivery fee per order (which is independent of the order size) and \$4.75 per kg. SarahAc€?cs annual holding cost is 25%. Assume 52 weeks per year and 5 days per week. If Sarah wants to minimize inventory holding and ordering costs, how much Palm oil should she purchase with each order (in kgs)?

Q12) SarahAc€?cs supplier is willing to sell her Palm oil at a 5% discount if she purchases 10,000 kgs at a time. If she were to purchase 10000 kgs per order what would be her average inventory holding and delivery fees per day (in \$s)? (Note, do NOT include her purchasing costs per day, which would be 1000 x 4.75 x 95%.)