Assume you are building custom motorcycles. All custom bikes use some standard parts. Part number HD-60 is
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Assume you are building custom motorcycles. All custom bikes use some standard parts. Part number HD-60 is stocked in your inventory of component parts. Each year you use about 2,000 HD-60 components at a cost of $25 each. Storage costs, which include insurance and cost of capital, amount to $5 per unit of average inventory. Every time an order is placed for HD-60 components, it costs $10.
a. How many items of HD-60 should be ordered at a time?
b. What are the annual costs of ordering HD-60 components?
c. What is the annual cost of storing HD-60 components?
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Related Book For
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
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