Bell Canada stocks a certain switch connector at its central warehouse for supplying field service offices. The
Question:
Bell Canada stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,700 units. Bell estimates its annual holding cost for this item to be $24 per unit. The cost to place and process an order from the supplier is $73. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days.
a) Find the economic order quantity in units? (round your response to the nearest whole number).
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b) Find the annual holding costs (round your response to the nearest whole number).
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c) Find the annual ordering costs (round your response to the nearest whole number).
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d) What is the reorder point? in units ? (round your response to the nearest whole number).
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Operations Management Sustainability and Supply Chain Management
ISBN: 978-0133764345
2nd Canadian edition
Authors: Jay Heizer, Barry Render, Paul Griffin