The Knight Company operates 365 days a year and uses 210 liners each day. Using a...
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The Knight Company operates 365 days a year and uses 210 liners each day. Using a Continuous Inventory System, Knight orders 10,950 liners at a time. The orders are timed so that the new liners arrive just as inventory runs out (i.e. inventory level = 0). a. If C= $1100, what is the total ordering cost for all orders in a year (Annual Ordering Cost)? b. Assume the delivery truck is unloaded instantly when it arrives. What is the maximum inventory level? c. What is the average inventory level? Hint: the company pulls liners from inventory at a constant rate. When Knight places an order for more liners, the supplier is able to deliver the liners exactly 8 days after the order is placed. d. What is the reorder point, R? The Knight Company operates 365 days a year and uses 210 liners each day. Using a Continuous Inventory System, Knight orders 10,950 liners at a time. The orders are timed so that the new liners arrive just as inventory runs out (i.e. inventory level = 0). a. If C= $1100, what is the total ordering cost for all orders in a year (Annual Ordering Cost)? b. Assume the delivery truck is unloaded instantly when it arrives. What is the maximum inventory level? c. What is the average inventory level? Hint: the company pulls liners from inventory at a constant rate. When Knight places an order for more liners, the supplier is able to deliver the liners exactly 8 days after the order is placed. d. What is the reorder point, R?
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a To calculate the annual ordering cost you can use the formula Annual Ordering Cost Number of Order... View the full answer
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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