# optimal quantity of coal to receive in each order

Not what you're looking for?

The purchasing manager for the Atlantic Steel Company must determine a policy for ordering coal to operate 12 converters. Each converter requires exactly 5 tons of coal per day to operate, and the firm operates 360 days per year. The purchasing manager has determined that the ordering cost is $80 per order and the cost of holding coal is 20% of the average dollar value of inventory held. The purchasing manager has negotiated a contract to obtain the coal for $12 per ton for the coming year.

a. Determine the optimal quantity of coal to receive in each order.

b. Determine the total inventory-related costs associated with the optimal ordering policy (do not include the cost of the coal).

c. If 5 days of lead time are required to receive an order of coal, how much coal should be on hand when an order is placed?

##### Purchase this Solution

##### Solution Summary

Determine the optimal quantity of coal to receive in each order. Determine the total inventory-related costs associated with the optimal ordering policy (do not include the cost of the coal). If 5 days of lead time are required to receive an order of coal, how much coal should be on hand when an order is placed?

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Know Your Linear Equations

Each question is a choice-summary multiple choice question that will present you with a linear equation and then make 4 statements about that equation. You must determine which of the 4 statements are true (if any) in regards to the equation.

##### Multiplying Complex Numbers

This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.

##### Exponential Expressions

In this quiz, you will have a chance to practice basic terminology of exponential expressions and how to evaluate them.

##### Geometry - Real Life Application Problems

Understanding of how geometry applies to in real-world contexts

##### Graphs and Functions

This quiz helps you easily identify a function and test your understanding of ranges, domains , function inverses and transformations.