The inventory management costs for a certain product are S = $28 to order, and H=$1 to hold for a year. Annual demand is 2400 units. Consider the following ordering plans:

(a) Order all 2400 at one time

(b) Order 600 once each quarter

(c) Order 200 once each month.

Calculate the annual holding, setup, and total costs associated with each plan and decide which plan is the best option.

Transcribed Image Text:

Annual holding cost Annual ordering cost Total cost Q = 2400 Q = 600 Q=200 Annual holding cost Annual ordering cost Total cost Q = 2400 Q = 600 Q=200

Answer rating: 100% (QA)

Given S 8 H 1 Annual Demand A 2400 Units Q 2400600200 A... View the full answer